With a Czech trade license there are three possibilities: no VAT registration, VAT-light (identified person, osoba identifikovaná) or full VAT (plátce DPH). Which one you need depends on who your clients are and how much you invoice.
No VAT
Most freelancers start here. You invoice without VAT, file no VAT returns and claim no VAT back. This works as long as you have no business clients in other EU countries and stay below the full VAT limit.
VAT-light
When: as soon as you invoice a business in another EU country, even one invoice of 500 EUR. Also when you buy services from a business in another EU country, for example online advertising or software. Registering in advance for future business is possible, but the tax office often refuses it without an existing invoice.
- Invoices to EU businesses: without Czech VAT, with their VAT number and the note “reverse charge”. You do not collect VAT and send none to the tax office.
- Czech clients: nothing changes, you still invoice without VAT.
- Filing: a VAT return and an EU sales list (souhrnné hlášení), but only for the months with EU business.
- The catch: you cannot claim back VAT on your Czech expenses. And for services you buy from EU suppliers without VAT, you must declare and pay 21% Czech VAT yourself.
Full VAT
When: your revenue from Czech sources is above 2,000,000 CZK in a calendar year: then you are a VAT payer from 1 January of the next year. Above 2,536,500 CZK it is faster: you are a VAT payer from the next day. Invoices to businesses in other EU countries do not count towards these limits.
- Invoices: 21% VAT to Czech clients, and you can claim back the VAT on your Czech expenses.
- Filing every month: a VAT return and a control statement (kontrolní hlášení), a list of your Czech invoices and expenses, with everything above 10,000 CZK one by one. Plus an EU sales list when you have EU business clients.
- Voluntary registration is possible in theory, for example before large expenses, but the tax office refuses most requests.
Private customers in the EU (OSS)
There is one limit of 10,000 EUR a year for all your sales of goods and digital services to private customers in other EU countries together. Above it, you charge the VAT of your customer's country, through the One Stop Shop (OSS). Below it, these sales count as Czech sales.
Careful: these sales, and most other services to private persons abroad, count towards the Czech full VAT limit. So you can sell almost nothing in the Czech Republic and still have to register for full VAT, because of private clients abroad.
Buying goods in the EU
Without full VAT, you can buy goods from other EU countries with the seller’s VAT, as long as your purchases stay below 326,000 CZK in this calendar year and the previous one. Above that limit, you must register (at least VAT-light) and pay Czech VAT on these purchases. New cars and other new means of transport, and goods with excise duty (alcohol, tobacco, fuel), always have special rules, whatever the amount. Goods from outside the EU: import VAT and customs (clo).
Filing: electronic only, and strict
VAT returns, control statements and EU sales lists can only be filed electronically, from accounting software or the tax office portal (in Czech). Late or wrong filing quickly leads to fines of thousands of crowns, even for a single invoice a month. We have fixed many VAT returns made with easy-looking online invoicing tools. For correct invoices to Czech, EU and non-EU clients, use our free invoice generator.
We file your VAT returns for you with a VAT subscription or pay as you go.
Not sure which registration you need? Use the Free VAT check.
Myths, even heard from Czech accountants
- “You only need VAT-light above 1,000,000 CZK.” No: from the first invoice to an EU business.
- “Just write ‘no VAT’ or ‘0% VAT’ on the invoice, no registration needed.” No: you must register.
- “You can file VAT once a year, like the income tax return.” No.
- “VAT-light can be filed quarterly.” No: in every month with EU business.
- “Buying from the EU at 0% means no Czech VAT.” No: as VAT-light you pay the Czech VAT yourself.
- “With the 60/40 method you cannot claim VAT back.” No: with full VAT you can.
Wrong advice costs money: fines, and filing backwards, which is more expensive than doing it right from the start.
