An individual who has a registered seat, place of business, or establishment in the Czech Republic is required to register for VAT (Value-added tax) if its turnover exceeds CZK 1 million in 12 consecutive months. Even if the threshold is not surpassed, Czech and foreign entities can choose to register for VAT voluntarily.
Are you required to register for VAT in the Czech Republic? – Below is summarized and valuable information that can help you during the VAT registration process.
CZECH VAT registration process for foreign companies in the Czech Republic
Foreign companies might face obstacles right at the beginning of the VAT registration process. This is because VAT registration in the Czech Republic is possible only in electronic form – the applicant may use either a data box or a verified electronic signature. However, it is impossible for companies that were not established in the Czech Republic to acquire them. The foreign company, hence, needs a representative in the Czech Republic who will represent the company and, based on a signed power of attorney, arrange the registration for value-added tax or VAT One Stop Shop (OSS) on its behalf.
Additionally, the official language of the Czech tax authorities is solely the local language, thus all communication and documents must be in Czech. It is the obligation of the abovementioned representative to guarantee professional communication with tax administrators, including answering any additional questions and mitigating doubts.
CZECH VAT registration process and related documentation
Generally, for the Czech VAT registration, the following documents are required:
- an original extract from the Commercial Register,
- confirmation of VAT registration in your country,
- confirmation of bank account,
- cover letter explaining your planned/ongoing business activities in the Czech Republic,
- additional documents depending on the reason for VAT registration,
- name and seat of the company, and
- list of the other VAT numbers and registration dates in the European Union
The general process of Czech VAT registration usually takes one or two months, depending on the quality of documentation delivered to the tax office within the registration procedure.
The tax office must comprehend the reasons for registration, then allocates a VAT Number (DIČ), which serves to identify payments from the payer. The validity of a VAT number allocated by any EU Member State can be validated on the website of the European Commission. This number is automatically allocated to mandatory VAT payers.
Professional support in the registration process
Do you help with your VAT registration in the Czech Republic so you can get your business off to the right start, let’s go ahead together and contact your Damalion expert now, and we’ll be happy to guide you through.
