VAT payer - You become a payer either mandatorily by law or voluntarily.
- Mandatory registration: If your turnover for 12 consecutive months exceeds
2,000,000 CZK. - Voluntary registration: It can be advantageous if you want to claim a VAT deduction from received invoices (input).
- Foreign entities: Companies without a registered office in the Czech Republic that carry out taxable supplies here become payers immediately (regardless of turnover).
Identified person (so-called "incomplete payer") - This regime is intended for entrepreneurs who remain non-payers in the Czech Republic but trade with foreign countries. You become an identified person if:
- You purchase goods from the EU: The value of goods from another EU country exceeds 326,000 CZK per calendar year.
- You receive services from the EU: For example, if you use software, advertising (Google/Facebook), or consulting from a company in another EU country.
- You provide services to the EU: If you invoice services to a company in another EU country (the place of supply is determined by the recipient's location).
Main difference: While a VAT payer is entitled to deduct tax on purchases, an identified person does not have this option. They only have the obligation to declare and pay tax on received cross-border supplies.
Our tip: Not sure if you are already subject to the registration obligation? We can help you assess your turnover and cross-border transactions and handle all the administration with the tax office.