The rise in VAT in the Czech Republic – 2013

Changes in the law on the rate of VAT in force in the Czech Republic as of 2013

This is important information for all our clients who have business contacts with the Czech Republic

On December 21st, 2012, Czech president Václav Klaus signed on a series of amendments to the VAT law. Below are the main changes:

• 1. A rise in the rate of VAT on services and consumer products defined as non-essential from 20% to 21%.

  2. A rise in the rate of VAT on essential consumer products such as basic foodstuffs, transport, and books from 14% to 15%.

  3. New registrants for VAT, are obliged to report monthly. Until the end of 2012, a business owner could choose between a monthly or quarterly report. Companies that chose to report every quarter during 2012 will be allowed to continue doing so.

Improvement in VAT enforcement and collection:

• 1. Every business owner who reports to VAT has to report the company's bank account number. The company has to state its bank account number on every invoice.

  2. If a customer pays for a service or product in cash or by bank transfer to an account other than the company's/supplier's official bank account, the tax authorities may collect the VAT payment, if the company/supplier does not pay the VAT payment.

  3. As of 2013, a database of companies that have not paid the required VAT has been made available to the public.

The company's advisors will be glad to answer any query on the subject of tax in the Czech Republic and anything else concerning the establishment, operation, or management of a business in the country. Contact us here