Czech Republic introduces VAT reverse charge mechanism on domestic supplies

30 August 2016

As of 29 June 2016 the Czech Republic introduced a new reverse charge mechanism on the domestic supply of goods from non-resident businesses to Czech VAT registered companies. This new reverse charge rule will mean that businesses outside of the Czech Republic will not need to get VAT registered when only making Czech domestic supplies, instead their customers will have the requirement to account for the VAT in their own returns.

The new rules will not affect businesses that were VAT registered before the 29 June 2016 as they will still have the requirement to account for Czech VAT on their supplies.  These businesses do however have the option to de-register for VAT purposes within six months from the date that this was implemented, but only if their sales of goods take place in the Czech Republic to Czech VAT registered businesses.