Czech Republic: Reverse Change VAT Mechanism To Be Implemented
On 21 June 2019, the European Commission issued a proposal for a Council implementing the decision that authorised the Czech Republic (Czechia) to apply for the generalised reverse charge VAT mechanism on all domestic transactions above €17,500 (CZK 450,000).
If this measure is approved by the European Council, the new reverse charge mechanism scheme will come into effect from 1 January 2020 for two and a half years.
The reverse charge mechanism will withdraw the VAT cash payment from a transaction and will mean that the seller will not charge VAT. Instead, the purchasers will report the sale through their own VAT return without any cash payment (reverse charge).
According to the Czech Tax authority, this new mechanism is aimed at helping to fight trader fraud in the Czech Republic.
Visit our Czechia VAT Guide page for the latest Czechia (Czech Republic) VAT information including VAT rates, registration requirements, deadlines, invoicing rules, EC Sales List and VAT Ledger Statement requirements.
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