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Registration as a VAT payer / Identified person in Czech Republic

Entrepreneurs are included in the register of VAT payers in two cases:

  • voluntarily (if the company’s turnover is less than 1 million Czech korunas per year, but, at the same time, it is economically justified to obtain this status)
  • forced (upon reaching the minimum turnover of 1 million Czech korunas within the next 12 months)

What about the Identified Person (individual)?

A company or an individual entrepreneur is obliged to register as an identified person in the following cases:

  • Purchase of goods in another EU Member State with a total value that exceeds CZK 326,000 (excluding any product subject to consumption tax).
  • Receiving services in the Czech Republic from entrepreneurs from another country. For example, the services of companies like Facebook, Google, Uber, Wolt, Bolt, Airbnb.
  • Provision of a service in another EU country

It is worth emphasizing that in all these cases the following is required:

  • detailed analysis of the situation and correct paperwork
  • consistent communication with the tax department (provision of required documents, explanation of the current activities of the company, and in some cases, future plans).

It is critical to understand that a minor error in the implementation of the above points can not only affect the rejection of the application, but also create additional suspicions on the part of the tax department, which will likely entail subsequent checks and other unpleasant consequences.

That is why we recommend that you entrust this kind of communication and applications to experienced specialists of the FChain Corporation. One more important reason to contact us is that having familiarized ourselves with the performance indicators of your company we will be able to select the appropriate status and optimize tax costs as much as possible. This will allow you not only to avoid possible difficulties, but also to direct funds to the development of the business itself or to cover expenses.

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