Indirect tax ebook - Czech Republic

General Tax Application/Time of Supply

Supply of goods

Time of Supply The taxable supply is realized on the delivery day (on sale acc. to the purchase contract) or on the take over day. When transferring a real estate, the taxable supply realization day is the day of handing over the real estate (latest on the delivery day of the document confirming the entry of the owner of property in the real estate cadaster).

The VAT must be accounted for by the end of the VAT period, in which the supply has been completed at the latest. The VAT on prepayments must be accounted for at the time of receiving the payments, even though the supply has not yet taken place. A special rule applies for the acquisition of goods from the EU. If the invoice for the delivery has not yet been issued, the VAT must be accounted for at the 15th of the following month.

Domestic goods delivery
The goods delivery in return for payment (and the real estate transfer) by a tax payer with a place of supply in CR is subjected to the Czech VAT. The place of supply on goods delivery without dispatch (transport) is the place, where the goods are at the time of delivery. If the goods are delivered within CR, the place of supply is CR and the seller is obliged to add Czech VAT to the sale.

Intra community goods deliveries
Goods delivered by a person registered for VAT in a different EU MS is exempt from VAT, if the goods are dispatched or transported from CR by a taxpayer, purchaser or third party, with the exemption of goods delivery to a person, for which the goods acquisition is not an object of the tax.

Supply of services

Time of Supply
The taxable supply is realized on the day the service was provided or the invoice was issued. The day of the realization of the taxable supply for transfer of rights is determined in a contract.

The taxable supply for a repeated supply is realized latest on the last day of the taxation period.

The VAT must be accounted for by the end of the VAT period, in which the supply has been completed at the latest. The VAT on prepayments must be accounted for at the time of receiving the payments, even though the supply has not yet taken place

Providing domestic services
Providing a service is considered for purposes of this Act as all activities, which are not a goods delivery or transfer of real estate (e.g. transfer of rights). Only services realized domestically (the place of supply is CR) are subjected to the Czech VAT.

Intra community services (new legislation 2010)
When determining the place of supply on services over the border, the decisive is to whom the service is provided:

1. Services to non-taxable persons (to ultimate consumers)
• the place of supply is the place, where the supplier’s seat or place of business is located. There are several exceptions from this rule listed in „Special provisions“.
2. Services to taxable persons
• the place of taxable supply is the place, where the customer’s seat, place of business or establishment is located. Again there are several exception listed in „Special provisions“. 
   

Special provisions

Services provided to both entrepreneurs and non-entrepreneurs

• Services connected with the real estate (including the services of an expert, appraiser, real estate agency, architects, accommodation) have the place of taxable supply where the real estate is located
• Passenger transportation – place, where the respective part of the transportation is carried out
• Cultural, artistic, sports, scientific, educational, entertainment and other similar services – place, where the event takes place
• Catering services – place, where the catering service is actually provided
• Short-term lease of vehicles (where the holding or use of the vehicle does not exceed 30 days or 90 days in case of ships) – place, where the vehicle is actually handed over to use

Services provided to non-entrepreneurs

• Brokerage – if the service is provided by a person acting on behalf and on account of a non-taxable person, the place of the taxable supply is the place, where the arranged service is provided
• Transportation of goods– place, where the respective part of the transportation is carried out; in case of transportation between EU member countries it is the place, where the transportation has started
• Services connected to the transportation (loading, unloading, handling), works on movable assets – place, where the service is actually provided
• Services provided to a foreign person (such as a cession of rights, advertising, advisory and financial services, lease of movable assets other than vehicles) – the place, where the seat or residence of the foreign person is located

• Introduction
• Scope
• Registration
• Tax rates
• Reporting & filing
• General tax application/Time of supply