Czech Republic: Guidance on VAT and e-commerce, pending transposition of EU VAT Directive revision

Attempt to provide guidance that would be applicable after July 2021

Attempt to provide guidance that would be applicable after July 2021

An amendment to the EU value added tax (VAT) Directive concerning e-commerce (effective since 1 July 2021) has not yet been transposed and implemented in the Czech Republic.

The Czech tax administration released information in an attempt to provide guidance that would be applicable after July 2021, and confirmed that until the Czech VAT law is amended, taxpayers can follow the current wording of the law or may apply the “spirit” of the language of the amended EU VAT Directive.

  • One change under the VAT Directive amendment concerns the repeal of tax thresholds for EU Member States, from 1 July 2021. Until now, dispatched goods having a value of less than the set threshold have been subject to tax in the country of dispatch.
  • If the place of taxation is another EU Member State, the duty to tax the goods in the country of the end-user recipient in another EU Member State will by no means be affected by a delay in the legislative process in the Czech Republic. 

Another question is whether it will be possible to use a one-stop-shop (OSS) in the Czech Republic for tax settlement purposes even before the Czech amendment is enacted and effective. The tax administration’s information allows for this option, seeming to indicate that the OSS mechanism is already fully operational. It has been possible to register for the OSS from April 2021. 

Since Czech taxpayers sending goods to end-use customers in the EU must continue to declare the tax bases for their sales in their Czech VAT returns even if they use the OSS, the tax administration also clarified this procedure. There is also a change to the VAT return forms—"sales in question” will be declared in line 24. 

For imports of low-value consignments, the current exemption from VAT for consignments having a value of less than €22 will remain in effect until the Czech amendment is enacted. This also applies to imports using the import-one-stop-shop (IOSS) mechanism. 

The tax administration also provided information about the direct application of the directive to distance sales of goods and distance sales of imported goods that are facilitated by electronic interfaces (platforms).  

The Czech customs administration also issued information about the link between VAT registration and the duty to file Intrastat reports.
 

Read a July 2021 report prepared by the KPMG member firm in the Czech Republic

 

 

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