Identified person: Who must register and how?

30.08.2024

The status of an identified person in EU countries was created to allow entrepreneurs required to declare tax on related cross-border transactions to avoid immediate full-fledged VAT payer registration.

This means that a person identified for tax purposes, unlike a VAT payer, is only required to submit a tax return if they have a tax liability in the tax period.

Who must be identified as an identified person?

You must be identified (in accordance with Article 6, paragraphs g-i of the VAT Act) if you are not a VAT payer but meet one of the following conditions:

If you are a taxable person who is not a VAT payer, or a legal entity that is not subject to tax, and you purchase goods from another EU Member State that are subject to VAT in this country. An exception is if you are acting as an intermediary in a so-called intra-Community triangular transaction.
If you are a taxable person with a registered office or establishment in this country, you are not a VAT payer, and you receive a taxable supply with a place of supply in this country from a person not registered for VAT here. This could be the provision of a service, the delivery of goods with installation or assembly, or the delivery of goods through electronic networks.
If you are a taxable person with a registered office or establishment in this country, you are not a VAT payer, and you provide a service with the place of supply in another EU Member State under Article 9(1) of the VAT Act, except for services that are VAT exempt in the other Member State.
If you are a taxable person who is not a VAT payer, have a registered office or establishment in this country, and you provide certain services under the special scheme for a single electronic registration and payment mechanism.
If you are a taxable person who is not a VAT payer, or a legal entity that is not subject to tax, and you purchase goods from another EU Member State in this country in accordance with § 2b of the VAT Act.

You may also voluntarily register for VAT even if the above conditions do not apply to you. In most cases, it will be the situations described in points 1-5 that trigger the requirement to be identified for VAT purposes.

Who does not need to become an identified person?

You are not required to become an identified person if you provide services or sell goods to third countries outside the EU.

How to register as an identified person?

You must submit a registration application electronically within 15 days of becoming an identified person, either through the Tax Portal of the Financial Administration or via the electronic data mailbox.

As an identified person, you must keep records of all expenses related to your VAT obligations. These records should be organised in a way that facilitates the preparation of a tax return or summary report.

What should I do if I register late as an identified person?

If you exceed the specified turnover and fail to meet the registration requirement, you will be registered retroactively, meaning from the date the obligation originally arose. You will need to submit a tax return retroactively for the entire tax period from the date of registration, and you may face penalties for the late submission of the tax return and late payment of tax.

Being an identified person, can I claim a VAT refund?

As an identified person, you are not eligible for VAT refunds. VAT refunds are exclusively granted to registered VAT payers who meet specific legal requirements. Consequently, it is often beneficial for a taxpayer to consider becoming a voluntary VAT payer to potentially benefit from VAT recovery.

Am I required to submit a VAT summary report as an identified person?

You are only obligated to file a VAT return if you have engaged in any taxable transactions. Furthermore, if you have provided services to other EU member states, you are required to submit a monthly summary report. This summary report must be filed electronically through the Tax Portal of the Financial Administration.

Tax Period and Tax Return

The tax period for an identified person is the calendar month.

An identified person is required to submit a tax return only if they have an obligation to declare tax during the tax period, specifically if they have:

Purchased goods from another EU member state,
Acquired services from a supplier based abroad,
Bought goods as part of a triangular trade within the EU,
Purchased a vehicle in another country and imported it into the Czech Republic.

This obligation applies within 25 days after the end of the tax period. The tax must be paid within this timeframe.

Identified persons, like VAT payers, must submit their tax returns electronically, either through a data mailbox or via the Financial Administration portal.

Feel free to consult with our specialists, and we will answer all your questions regarding the operation of your business in compliance with European laws.

https://www.fakturoid.cz/almanach/dane/identifikovana-osoba