Kontrolni Hlaseni for Full VAT-registered businesses
Important: 2016 changes: Kontrolni Hlaseni (KH) - to be filed with the VAT ReturnStarting February 2016, all VAT transactions within Czech Republic must be reported to the Tax Office.
Simply put, the KH is a long list of *each* invoice and *each* expenses in Czech Republic in that month, with VAT numbers of buyer and seller, the type of transaction, the base amount and the VAT amount.
It's a bit like an Electronic Sales List (ESL) - except that the ESL only records issued invoices and credit notes (not expenses), and only to customers in another EU country (but not in Czech Republic).
A second difference is that the KH has draconian penalties for late filing (1 second after deadline = 1000 CZK penalty), not responding to a request (vyzva) of the Tax Office 10.000 CZK, or not filing at all are between 10.000 and 500.000 CZK.
Where VAT Returns have a grace period of 5 days after the deadline - the grace period for the KH is exactly 0 (zero). This just simply means that the VAT Return itself cannot be filed late anymore; the accounting software does not produce a KH before the VAT Return, and secondly, if one was to file only a KH and a few days later the actual VAT Return - it is to be expected that it leads to issues, especially when the VAT amounts don't match (which then would lead to penalties).
Which businesses have to file the Kontrolni Hlaseni?*ONLY* businesses that have a Full VAT registration have to file, so *not* the ones with a VAT-Light registration.
When is the Kontrolni Hlaseni filed?The KH *ONLY* will have to be filed if there were any VAT transactions in Czech Republic that month. So, in case the business did not file any invoice or did not have any expense in that month - no KH is required.
Some businesses do not have expenses each month - so it might be tempting to file a KH only every few months by saving up the expenses. Although creative, there are signals that the Tax Office may not refund VAT of expenses that were filed in the wrong month and / or an update of the KH must be filed then.
How to send the Kontrolni Hlaseni to the tax officeFiling of the KH can only be done in a special XML electronic format.
There are three ways to do this:
- using the website of the Ministry of Financy (in Czech only).
- using a datová schránka to send an XML file made with accounting software
- have the accountant produce and send it.
Steps to be taken in preparation of the Kontrolni Hlaseni
- get of each customer his VAT number, and check it in the ARES system,
- accurately record all sales and credit notes to CZ customer each month,
- each expense must have a proper invoice / paragon with the seller's VAT number,
- sending papers not later than the 5th of the following month, so we have enough time for processing. The deadline for providing papers is the 5th of each month.
Note on VAT Deadline: Send in your papers by the 5th and avoid extra costs / penalties!
Clients that do not provide all documents by the 5th of each month run the risk that there will not be enough time to process the papers during office hours (hourly fee outside office hours +50%) or not before the deadline (which results in penalties from the Tax Office).