General Information on VAT & Business Abroad

When to Charge and Pay VAT - a handy table

I SELL Claiming
VAT on CZ expenses
Claiming
VAT on EU expenses
CZ client
no VAT number
CZ client
with VAT number
EU client
no VAT number *1
EU client
with VAT number *2
non-EU client
no VAT number *2
I am not
VAT Registered
no no I can not charge VAT I can not charge VAT not possible to sell to not possible to sell to possible to sell to
I AM
VAT-Light Registered
no no I can not charge VAT I can not charge VAT I charge 21% VAT I do not charge VAT
(reversed charges)
I do not charge VAT
(other reason)
I AM
VAT Registered
yes via foreign VAT Return I charge 21% VAT I charge 21% VAT I charge 21% VAT I do not charge VAT
(reversed charges)
I do not charge VAT
(other reason)

I BUY Claiming
VAT on CZ expenses
Claiming
VAT on EU expenses
CZ supplier
no VAT number
CZ supplier
with VAT number
EU supplier
no VAT number *1
EU supplier
with VAT number *2
non-EU supplier
no VAT number *2
I am not
VAT-Registered
no no I do not pay VAT I pay 21% VAT I do not pay foreign VAT I pay foreign VAT Goods: CLO and 21% CZ VAT (NO claim back) *3
I AM
VAT-Light Registered
no no I do not pay VAT I must pay 21% VAT, NO claim back I must pay 21% CZ VAT, NO claim back I must pay 21% CZ VAT, NO claim back Goods: CLO and 21% CZ VAT (NO claim back) *3
I AM
VAT Registered
yes via foreign VAT Return I do not pay VAT I must pay 21% VAT, CAN claim back I do not pay foreign VAT I do not pay foreign VAT
(reversed charges)
Goods: CLO and 21% CZ VAT (CAN claim back) *3

Note 1: Careful with selling to or buying from EU businesses without VAT number. They probably have the obligation to register for VAT, in the same way you have if you sell in the EU / abroad. If you want to avoid registering for VAT, you might be better off selling as a private person (and not as a business) through eBay or Amazon.

Note 2: Reversed charges (charging 0% VAT) applies for all VAT-registered businesses based in EU, no VAT is charged to most companies outside EU. (There are a few countries outside EU that have VAT, there are even some territories in EU that *do not* have VAT or no reversed charges apply)

Note 2: Private clients or businesses in the EU without VAT number must pay the Czech 21% VAT in case they buy from an VAT-registered business in the EU.

Note 3: Goods imported from outside the EU may be subject to CLO (import tax) and 21% Czech VAT (these are collected by the Czech customs office). Services from outside EU are excempt of CLO and VAT.

Note 4: Selling goods / providing services in another EU country (by physically being there) may require a local VAT registration, and local VAT Reporting. Examples: a CZ-based business selling T-shirts at a concert in Poland, or organising a seminar in Germany, selling tickets at the door.



Checking online a VAT number - for Czech and EU VAT numbers

Charging and paying VAT depends on who is VAT registered and where.

Czech clients can be checked in the ARES system, see
How to find ICO and other sro company / trade license (živnostenský list) data

VAT of foreign clients based in the EU can be checked here: VIES VAT number validation

Important: New 2013 rules for Registration of VAT concerning business in EU

VAT registration is obligatory if you use or offer services to companies / persons in the EU.

VAT registration is obligatory if you import from an EU country cars, tabacco, alcohol, fuel (with excise duties) or goods exceeding a value of 326.000 CZK.

Which VAT can be claimed? Can foreign VAT be claimed?

Czech VAT on expenses made in Czech Republic can be claimed with a regular monthly / quarterly VAT Return.

EU VAT can also be claimed to a certain extent (depending on the country), but not in the regular VAT Return. This VAT Return will have to be sent in an electronic format to the foreign tax office, not the czech tax office.
It is a fairly complicated business, and actually it only makes sense for larger clients, such as logistics companies, processing invoices / receipts without foreign VAT (example: fuel, MAUT, truck repairs).

When ordering something from abroad, provide your VAT number to the seller, so that he is able to issue an invoice without VAT (actually: reversed charges). In that case you do not need to claim the foreign VAT back, because you have not paid it in the first place!

VAT on sales outside Czech Republic - only 0% if both seller and buyer are VAT registered.

If your company / trade license is VAT registered, on sales of good and services outside Czech Republic to a client in another European country no VAT is charged, provided that the buyer is also VAT registered.

On sales to private individuals and non-VAT registered businesses in Czech Republic and the European Union VAT is charged, so in that case you have to add the Czech VAT of 21% to your invoice.

There are many exceptions to the above rules, depending on the destination country (especially for consultants: to which country the invoice goes, even though you may actually work in another country) and type of good.

EU Sales List (ESL) from 01.01.2010

Starting 01.01.2010, any VAT-registered SRO or trade license sending invoices to VAT-registered clients based in another EU country has the obligation to report electronically on monthly or quarterly basis to the tax office. These reports are no VAT reports, but must be filed in addition to VAT reports. See also