Optional reverse charge (art. 199c of the VAT Directive)
Article 199c of VAT Directive permits Member States, by way of derogation from Article 193 of that Directive and under conditions, until 30 June 2022, to introduce a generalized reverse charge mechanism on non-cross border supplies of goods and services, providing that the person liable for the payment of VAT is the taxable person to whom all supplies of goods or services are made above a threshold of € 17,500 per transaction. The Council Implementing Decision (EU) 2019/1903 of 8 November 2019 authorizing the Czech Republic to apply the generalized reverse charge mechanism derogating from Article 193 of the EU VAT Directive (2006/112) was published in the Official Journal of the European Union. The Czech Republic is authorized to apply the generalized reverse charge mechanism – as described in Article 199c of the EU VAT Directive (2006/112) – from 1 January 2020 until 30 June 2022.
Measures to prevent tax evasion – Unreliable taxpayer
Since 01/10/2014, criterions under which a supplier becomes an “unreliable taxpayer” have been drastically extended [with a consequence that more and more suppliers will be reported in this black list]. Your company will be automatically jointly and severally liable for the payment of all VAT unpaid by its supplier if the latter is listed as “unreliable taxpayer”. In order to avoid this liability, VAT due can be paid directly, under specific conditions, by your company to the Czech VAT authorities. We strongly suggest checking here the status [“unreliable taxpayer or not”] of your CZ supplier before any payment.
[…] Member States may provide that a person other than the person liable for payment of VAT is to be held jointly and severally liable for payment of VAT [art. 206 of the VAT Directive
Local reverse charge on specific goods
Since 01/04/2015 a new reverse charge mechanism is applicable for domestic sales of mobile phones, games machines, laptops, tablets and computer chips, cereals and industrial crops, raw and semi-processed metals, including defined precious metal exceeding CZK 100,000. Regarding sugar beets, reverse charge will be applied as of 01/09/2015. Since 01/01/2016, parties can opt to conclude an agreement on the application of a reverse charge mechanism with no limit on the good's value.
Introduction of a VAT Control Statement
All companies VAT registered in Czech Republic will have a new obligation to submit by electronic means data in the VAT Control Statement. Sanctions from 1.000 CZK to 50.000 CZK will be applicable in case of failure to do so.
VAT obligations – Mandatory electronic filing
All companies registered for VAT purposes in Czech Republic are normally required to submit their VAT returns electronically via the application “Elektronica podani pro financni spravu”. This is also mandatory for additional tax return, including all annexes, recapitulative statement or subsequent recapitulative statement, applications for VAT registration, notification about change of registration data, application for deregistration [except the registration forms where the tax administration did not publish the e-filing format and structure]. Taxpayers with a turnover for the immediately 12 consecutive calendar months not exceeding CZK 6,000,000 had previously a choice of submitting their VAT return electronically or on paper and to deliver it by mail or in person. This tolerance has been withdrawn on 01/01/2016. All taxpayers have now to submit all the VAT related forms electronically.
CZK 2,000 fine will be imposed in case this obligation of filling electronically is not met.
Member States shall allow, and may require the VAT return to be submitted by electronic means, in accordance with conditions which they lay down [art. 250 of the VAT Directive].