Shrnutí: VAT registration is mandatory in 2026, particularly if the statutory turnover threshold is exceeded; the thresholds are 2,000,000 CZK and 2,536,500 CZK per calendar year. However, under certain conditions, you can also register for VAT voluntarily. If you no longer meet the requirements for VAT registration, you may also consider deregistering from VAT. We’ll explain when these situations arise and how to proceed.
What is VAT? It is a tax that “adds” a certain percentage to the price of virtually every good or service. The government collects it in installments at each stage of the supply chain: every business owner pays VAT to the government on what they sell and, at the same time, deducts VAT from what they purchase for their business. From a legal standpoint, we distinguish between three types of VAT entities:
The difference between a taxpayer and an identified person is crucial: a taxpayer reports all domestic and cross-border transactions on the form, while an identified person files a return only when they make a specific cross-border purchase.
We’ll help you navigate the law—whether you’re dealing with a specific tax situation, preparing for a tax audit, or defending yourself in court.
An amendment to the Value-Added Tax Act, which took effect on January 1, 2025, introduced a major change: turnover is now tracked for the entire calendar year, and two thresholds have been established. If the total of taxable transactions in a given year exceeds 2,000,000 CZK, you will become a VAT payer as of January 1 of the following year. However, anyone who exceeds the higher threshold of 2,536,500 CZK during the year becomes a tax payer the very next day. You must file your registration no later than ten business days from the date you exceeded the threshold.
Graphic designer Ivana secured contracts totaling 2,120,000 CZK in 2025. She exceeded the first threshold but not the higher one. She will therefore become a VAT payer as of January 1, 2026; however, she must submit her registration application within 10 business days of the date on which she exceeded the CZK 2,000,000 revenue threshold during 2025.
It isn’t always worth waiting until the threshold is exceeded. If you primarily do business with VAT-registered entities or purchase goods within the EU, voluntary VAT registration may be advantageous because you can claim input VAT credits.
Attach contracts, invoices, and a business plan to your application to demonstrate that your business is not just “on paper.” The tax office may also request bank statements to verify cash flow.
From experience: When registering voluntarily, it’s important to provide the tax authority with sufficient evidence that you are actually carrying out or preparing for a genuine economic activity. Problems can arise, in particular, when an applicant submits only the application form without supporting documents that verify business activity.
How do taxes work for legal entities? What is the VAT rate for businesses, and how do they file their tax returns? You’ll find out in our article.
After registration, include your tax ID number on all tax documents, and in your first tax return, also include transactions carried out from January 1 of the given year through the day preceding your registration.
How do you issue an invoice, and what should you keep in mind? Our article will tell you.
The primary report is the VAT return. The standard tax period is one month; those with a turnover of less than 15 million in the previous year may apply for the quarterly filing regime. Both the return and the control report must be filed by the 25th day of the following month.
Anyone who files the return more than five business days after the deadline will pay a penalty of 0.05% of the assessed tax for each day of delay, up to a maximum of 300,000 CZK.
The control report has its own penalty scale: 1,000 Kč for the first late filing in a year, CZK 10,000 for filing after a reminder, and up to CZK 50,000 if the tax administrator issues multiple reminders. Intentional obstruction may result in a fine of up to 500,000 CZK.
The status of an identified person primarily applies to small businesses that purchase goods or services from entities in other member states. An identified person pays Czech VAT on such purchases but does not claim VAT credits on their domestic sales. They file a VAT return only for the period in which they acquired the service or goods and are not entitled to a tax credit.
When should you register as a self-employed person for VAT? What are the advantages and disadvantages? The next article will answer these questions.
Before you issue an invoice, it’s a good idea to verify whether your business partner is actually a VAT payer. The fastest way to do this is through the public ARES system. After entering the company ID number (IČO), a detailed report will appear showing the “VAT” column with the current registration status. You can download the report for free as a PDF, which serves as proof in case of an audit.
There are several ways to cancel VAT registration, depending on various circumstances:
If your turnover for the last calendar year fell below 2,000,000 CZK or you have ceased business operations, you can submit an electronic request to cancel your VAT registration. The tax authority will verify that you have no outstanding tax liabilities and are not an unreliable taxpayer. If the request is granted, you will cease to be a VAT payer on the day following delivery of the decision.
In practice, a common misconception is that VAT registration automatically expires once your annual turnover falls below two million crowns. However, it is not enough to simply monitor your current turnover—you must always verify that all legal conditions for deregistration are met.
Note regarding adjustment of the deduction: When deregistering, you must adjust the VAT deduction for fixed assets if their five-year period (or ten-year period for real estate) has not yet expired. You must report the remaining portion of the deduction in your final tax return.
The tax office may also deregister you on its own—for example, if you have not been paying VAT for an extended period. In practice, this means you are prohibited from issuing invoices with VAT; however, if you exceed the threshold again, you would automatically become a VAT payer once more.
The most common mistakes made by taxpayers relate to late filing of returns, failure to fill out required fields on the new form, and failure to report a change in bank account information —failure to comply with procedural obligations may result in an administrative fine of up to 500,000 CZK.
Add to that an error in the tax rate or failure to file a mandatory control report: each additional error increases the likelihood of a tax audit, which—in the event of repeated violations—can lead to the business being labeled an unreliable taxpayer —and to a suspicious attitude on the part of your business partners.
VAT registration in 2026 is governed by rules introduced in 2025: turnover is tracked on a calendar-year basis, and the thresholds of 2,000,000 CZK and 2,536,500 CZK are decisive. Upon exceeding the lower threshold, a business owner generally becomes a VAT payer as of January 1 of the following year, but may choose to become a VAT payer earlier; exceeding the higher threshold means that VAT liability begins on the day following the date it was exceeded. The application must be filed within 10 business days. Voluntary VAT registration is possible even without exceeding the turnover threshold. Conversely, canceling VAT registration requires meeting statutory conditions and may also affect previously claimed VAT credits.
Yes, under certain circumstances, voluntary registration may be an option even for a person who is still preparing to start a business. However, the tax authority may require proof of actual or planned economic activity.
Not always as a taxpayer. However, depending on the type of transaction and the business partner’s country, there may be an obligation, for example, to register as an identified person.
Yes. A VAT ID number alone is not proof that a business owner is currently a VAT payer. It is therefore advisable to verify VAT payer status in the VAT payer registry.
An application may be filed at any time during the year, but the tax authority will cancel the registration only if the statutory conditions applicable to the specific taxpayer are met.
Not sure how to do your taxes correctly so you don’t get it wrong? We can help you navigate the law, whether it’s dealing with a specific tax situation, preparing for an audit by the tax authority or defending yourself in court.
Ondřej is the attorney who came up with the idea of providing legal services online. He's been earning his living through legal services for more than 15 years. He especially likes to help clients who may have given up hope in solving their legal issues at work, for example with real estate transfers or copyright licenses.
Ondřej is the attorney who came up with the idea of providing legal services online. He's been earning his living through legal services for more than 15 years. He especially likes to help clients who may have given up hope in solving their legal issues at work, for example with real estate transfers or copyright licenses.
We’ll review your case and suggest how to resolve it for CZK 690.
In person and online. Just choose the appropriate service or opt for an independent consultation when you are unsure.
