VAT in 2025: VAT Registration in the Czech Republic

A comprehensive amendment to the Czech VAT Act will take effect on 1 January 2025. In this series of articles, we will explore the most important VAT changes in detail. First, we’ll look at the new rules for calculating turnover for mandatory VAT registration.

Turnover Calculation for VAT Registration

Until the end of 2024, a person became a VAT payer if their turnover exceeded CZK 2 million in the 12 immediately preceding calendar months. From 1 January 2025, the turnover will instead be calculated based on the calendar year, i.e., from January to December.

The amendment also introduces two turnover thresholds for mandatory VAT registration, which determine when a person becomes liable to register for VAT. These thresholds are:

• CZK 2,000,000 – If a person exceeds this threshold within a calendar year but does not exceed CZK 2,536,500, they become a VAT payer on 1 January of the following year.
  
• CZK 2,536,500 – If this higher threshold is exceeded, the person becomes a VAT payer the day after the threshold is crossed.
  

A voluntarily liable person may also register for VAT on the day following the exceedance of CZK 2,000,000. However, they must submit an application in time and indicate that they wish to become a VAT payer immediately after crossing the CZK 2 million threshold. In the registration application, this is specified in line 06, citing § 6 (2)(a) as the reason for registration.

On 29 January 2025, the Czech Financial Administration published official guidance regarding these changes. The document provides a detailed explanation of the new turnover calculation rules and is available here:
Information on changes in VAT registration from 1 January 2025 (PDF)

Application for Registration as a Taxpayer

Until the end of 2024, a taxpayer whose turnover exceeded CZK 2 million was required to submit an application for VAT registration within 15 days after the end of the calendar month in which the threshold was exceeded.

Starting from 1 January 2025, this deadline has been shortened. Taxpayers must now submit the application within 10 working days from the date the turnover is exceeded (§ 94 of the VAT Act).

A taxpayer can register voluntarily as a VAT payer from the day following the turnover exceeding CZK 2 million – but only if they submit the registration application within the statutory 10-day deadline. If they wish to make use of this option, they must indicate it in the application by selecting the appropriate reason in the section “Reason for registration in accordance with a specific provision of the VAT Act”—specifically, § 6 (2)(a).

If the taxpayer does not wish to use the option of immediate registration, they should indicate § 6 (1) as the reason for registration. In this case, the tax authority does not issue the registration decision immediately but waits until the end of the calendar year. If the taxpayer does not exceed the higher turnover threshold of CZK 2,536,500 by year-end, they become a VAT payer from 1 January of the following year, and this is confirmed in the registration decision.

If the taxpayer meets the conditions for registration, the tax authority will first send a written notice, and will issue the official registration decision no earlier than 1 December and no later than 31 December of the relevant calendar year.

If a taxpayer exceeds the second threshold of CZK 2,536,500 during the calendar year, they are required to notify the tax authority of this within 10 working days from the date the threshold is exceeded. In the application, they must indicate § 6 (2)(b) as the reason for registration. In this case, they become a VAT payer on the day following the date of the turnover breach, and the tax authority issues a registration decision accordingly.

Example

Mr. Novák is a resident taxpayer. When does he become a VAT payer, and for what reasons will he register?

By 31 December 2024, his turnover does not exceed CZK 2 million over 12 consecutive calendar months. For the calendar year 2025 (i.e., from 1 January to 31 December 2025), his turnover reaches CZK 2,100,000.

On 5 April 2025, Mr. Novák exceeds a turnover of CZK 2 million for the 2025 calendar year. On 8 September 2025, he exceeds the second threshold of CZK 2,536,500.

Decision

From 1 January 2026 — Mr. Novák becomes a VAT payer from 1 January of the year following the year in which the turnover was exceeded. He must submit the application for registration within 10 working days from the day the turnover of CZK 2 million was exceeded.

In the application, he should indicate § 6 (1) as the reason for registration. If he wishes to become a VAT payer immediately after exceeding CZK 2 million, he must indicate § 6 (2)(a) as the reason for registration and submit the application within the 10-working-day deadline.

From 9 September 2025, after exceeding the turnover of CZK 2 million, Mr. Novák must submit the first application for registration within 10 working days of exceeding the limit.

In this first application, he may voluntarily choose to become a payer immediately after exceeding CZK 2 million by indicating the reason for registration as § 6 (2)(a).
If he does not opt for immediate registration, he should state the reason for registration under § 6 (1).

At the same time, he must continue monitoring whether the second threshold of CZK 2,536,500 is exceeded during the remainder of 2025. If the second limit is exceeded, he must submit a second application for registration within 10 working days and indicate the reason for registration under § 6 (2)(b).

Consequences of Late Filing of the Registration Application

If a taxable person fails to file the registration application within 10 working days after exceeding the turnover of CZK 2 million, they lose the opportunity to voluntarily become a taxpayer from the day following the threshold breach. Instead, they must continue to monitor whether the second threshold of CZK 2,536,500 is exceeded by the end of the calendar year.

In addition, the entrepreneur is at risk of a fine for failure to comply with a non-monetary obligation in accordance with § 247a of the Tax Code.

Registration of a Person Who Only Makes Tax-Exempt Supplies Without the Right to Deduct the Tax

In accordance with § 6 (3), a person who only makes supplies for which they would not have the right to deduct VAT does not become a VAT payer.

Such a person is one who carries out only:

• Supplies exempt from tax without the right of deduction under §§ 54 to 56a, such as financial services, pension activities, insurance activities, the supply of land, supply of individual real estate objects, or lease of real estate;
  
• Supplies of real estate exempt from tax without deduction rights under § 62;
  
• Or supplies with a place of supply outside the country.
  

The rule still applies that supplies exempt from tax without the right to deduct, in accordance with other provisions, are not included in the turnover at all. This applies, for example, to medical services and the supply of medical goods under § 58.

However, if a taxpayer carries out both supplies exempt from tax without the right of deduction and taxable supplies, then for the purpose of registration, both turnovers are added together.

In accordance with § 6(3)(b), clause 3 of the VAT Act, from 1 January 2026, the turnover for the previous calendar year will also be considered. This means that from 2026, the turnover from exempt supplies without deduction rights in 2025 will be included in the registration threshold calculation.

Taxpayer Registration After Resumption of Economic Activity

As of 1 January 2025, a completely new basis for mandatory taxpayer registration is introduced in accordance with § 6 (4). It regulates the situation when a VAT payer cancels registration due to the cessation of economic activity. If in the year of registration cancellation, their turnover exceeded CZK 2 million and at the same time in the current or next calendar year they carry out taxable activity as a taxpayer, they become a taxpayer from the date of the taxable activity as a taxpayer. Note – in this case, the obligation arises from the date of the taxable transaction, not from the following day.

Example

The taxpayer submits an application, for example, on 1 July 2025, to cancel the taxpayer registration due to the cessation of economic activity in the country (§ 106 (1) of the VAT Act). The turnover for the reporting period from January to June 2025 exceeds CZK 2,000,000. The taxpayer’s registration is cancelled. However, after the registration is cancelled, for example in November 2025, the person carries out a taxable transaction in the country for which they would be entitled to a tax deduction if they were a taxpayer (e.g. a supply of goods). Given that in 2025 their turnover exceeds CZK 2,000,000, they become a taxpayer from the date of the supply in November 2025. According to § 94 (3) of the VAT Act, they are obliged to submit an application for registration within 10 working days from the date of the taxable supply.

Given that the amendment only comes into force on 1 January 2025, the turnover for the 2024 calendar year will not be checked during 2025. From 1 January 2026, however, the turnover for the 2025 calendar year will also be checked if the registration was cancelled in 2026.

Example

A VAT payer has a turnover for 2025 of more than CZK 2 million. In 4/2026, they ceased economic activity and for this reason their registration as a taxpayer was cancelled.

In 11/2026, they resumed economic activity and on 25 November 2026 make a supply for which they would have been entitled to a deduction (ordinary taxable supply).

From what moment are they a taxpayer again?

They become a taxpayer again from the date of the supply, i.e. from 25 November 2026.

Voluntary Registration as a VAT Payer

Voluntary registration as a VAT payer under § 6f will continue to follow the same rules as before the end of 2024. The only new condition is that the applicant must not be an unreliable person (§ 94a paragraph 1 of the VAT Act). If an unreliable person applies for voluntary registration, their application will be automatically rejected.

From 1 January 2025, only non-residents who are not registered under the small business regime for the domestic market (§ 6f paragraph 2 of the VAT Act) will be allowed to voluntarily register as VAT payers.

Legal Registration of the Taxpayer – Transitional Provisions

According to the transitional provisions, if the turnover is exceeded by 31 December 2024, the previous rules continue to apply.

Example

A person liable to pay tax in the country exceeds a turnover of CZK 2 million in December 2024 over 12 consecutive calendar months.

What should be done?

According to the transitional provisions, the previous rules apply – the application for registration must be submitted by 15 January 2025, and the person becomes a taxpayer from 1 February 2025.

From 1 January 2025, the turnover for legal registration will be calculated anew from the beginning of the calendar year, and the excess of CZK 2 million per calendar year will be monitored.

Deregistration of a Taxpayer – Transitional Provisions

There are no significant changes to the rules for taxpayer deregistration, except that from 1 January 2025, the turnover will be assessed as being less than CZK 2 million per calendar year, rather than over 12 consecutive calendar months.

If a taxpayer submits an application for deregistration before 31 December 2024, the previous rules apply.

Exception: if the taxpayer’s turnover for the 2025 calendar year exceeds CZK 2 million, the tax authority will not approve the deregistration.

If a person became a taxpayer before 31 December 2024, they may submit an application for deregistration in 2025, provided that their turnover in both the 2024 and 2025 calendar years did not exceed CZK 2 million. Additionally, at least one year must have passed since they became a taxpayer.

Under the transitional provisions, a taxpayer may also apply for deregistration based on turnover not exceeding CZK 2 million in the 12 immediately preceding calendar months.

Looking for reliable outsource accounting in the Czech Republic?

With 360WEDO, all your finances are under control. We provide professional outsourced accounting services in the Czech Republic, ensuring everything is on track – accurate, compliant, and stress-free. From tax filings to daily bookkeeping, we take full responsibility so you can focus on running your business.

Reach out to us through our website for a personal consultation. We’ll contact you shortly to discuss how we can support your business.

Source: