VAT is one of the fundamental taxes in the European Union, and the Czech Republic is no exception. Anyone conducting business or planning to sell products or services on the Czech market should understand how VAT works in the Czech Republic. In this article, we explain everything you need to know about Czech VAT in 2025: the VAT rates in the Czech Republic, who must register, when the obligation to file arises, and what the Czech VAT system looks like in practice.

What is VAT in the Czech Republic and why does it matter?

VAT (Value Added Tax), called DPH (Daň z přidané hodnoty) in the Czech Republic, is a consumption tax applied to nearly every purchase of goods or services. Ultimately, the consumer pays the tax, but the responsibility for calculating and remitting it to the Czech tax office lies with the business.

VAT in the Czech Republic is important both for Czech companies and foreign businesses, especially those engaged in distance selling, e-commerce, or storing goods in the Czech Republic. Knowing local regulations helps avoid mistakes that can cost both time and money.

What is the VAT rate in the Czech Republic in 2025?

In 2025, the Czech Republic has three basic VAT rates. Here is how they apply in practice:

• The standard VAT rate is 21%. This applies to most goods not covered by reduced VAT rates.

• The reduced VAT rate of 12% applies, among others, to:

  • food with delivery,

  • non-alcoholic beverages,

  • water supplies,

  • domestic passenger transport,

  • newspapers and magazines,

  • certain medicines,

  • some books and e-books,

  • catering services,

  • hotel accommodation services,

  • tickets to cultural and sporting events.

In practice, knowing which VAT rate applies to a given product is crucial. Incorrect application can lead to tax audits and penalties.

When is VAT registration required in the Czech Republic?

VAT registration in the Czech Republic can be mandatory or voluntary. For foreign companies, the most common triggers for registration include:

• storing goods within the Czech Republic,

• conducting B2C sales with deliveries to the Czech Republic,

• organizing events, conferences, or other activities in the Czech Republic,

• selling electronic services to individual customers in the Czech Republic.

VAT registration is not automatic. It’s important to know when the obligation arises. The key question is: what is the VAT registration threshold in the Czech Republic? If a company’s annual turnover exceeds 2 million Czech crowns (about 85,000 euros), it must register as a VAT taxpayer.

How does VAT filing work in the Czech Republic?

Once registered as a VAT taxpayer, the company must regularly submit VAT returns. Typically, VAT filing in the Czech Republic is monthly, though quarterly filing may be possible in some cases. VAT returns are submitted electronically through the Czech tax authority’s system. Returns must report sales values, VAT due, and any deductible VAT.

Companies are required to keep detailed VAT records and issue invoices in accordance with Czech regulations. Control reports, known as kontrolní hlášení, are also mandatory and are an important part of the Czech tax control system.

Czech VAT and e-commerce

If you run an online store selling goods to the Czech Republic, you need to watch EU limits. Since July 1, 2021, the new OSS (One Stop Shop) system allows sellers to avoid registering for VAT in each EU country separately. However, not everyone uses OSS. If you are not registered for OSS, you may have to file VAT locally in the Czech Republic.

Also, if you operate a warehouse in the Czech Republic (e.g., via Amazon FBA or a local fulfillment center), VAT registration and local filing obligations arise automatically.

Czech VAT and international services

For cross-border services, EU general rules apply. For B2B services, the reverse charge mechanism applies — meaning the buyer accounts for VAT in their country. For B2C services, VAT must be paid in the recipient’s country. Knowing the Czech VAT rules is therefore essential for correct reporting.

Can VAT paid in the Czech Republic be reclaimed?

Yes. Companies registered outside the Czech Republic but within the EU can claim a Czech VAT refund via the VAT Refund system (8th Directive). The claim is submitted in the company’s home country (e.g., in Poland through the e-Declaration platform), and Czech authorities process the refund.

Remember that claims can only be made for specific periods and must meet certain conditions (such as having correctly issued Czech VAT invoices).

Key takeaways about VAT in the Czech Republic

The Czech Republic is an attractive market for many businesses, but Czech VAT differs from systems in Poland or Germany. Knowing local VAT rates, registration rules, and filing obligations helps avoid tax problems and plan business activities better. If you wonder what the VAT rate in the Czech Republic is or which rate applies to your service or product, it is best to consult a local tax advisor or accounting office. The DPH system is transparent but requires a good understanding of details.