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Last checked: 30/11/2018

VAT Refunds – Czechia

Categories of expenditure that do not allow for VAT refunds

Some categories of expenditure do not allow for VAT refunds; in the Czech Republic these categories are:

a) goods and services for personal consumption,

b) travel, accommodation and subsistence costs of foreign persons,

c) goods and services relating to the entertainment of foreign persons,

d) telephone charges,

e) taxi services,

f) motor fuel.

You can read about this in more detail on the national portalcs.

Tax-refund arrangements

In the Czech Republic, the authorities will grant tax refunds to non-EU-based taxable businesses only if they offer similar tax-refund arrangements for businesses based in the Czech Republic.

Tax will be refunded on the basis of the reciprocity principle. This means that the State in which a foreign person is based will not levy value-added tax or any similar general consumption tax; if such a tax is levied, the amount thereof will be refunded to a taxable person based in the Czech Republic. A tax-refund claim in respect of goods and services may be made by a foreign person under conditions similar to those under which a tax-deduction claim may be made by a taxpayer.

A tax-refund claim relating to a taxable transaction carried out in the Czech Republic and accepted by a foreign taxable person who has no business premises within the European Union may be made by that person if, in the period for which he/she is applying for a tax refund, he/she does not perform transactions in the Czech Republic other than the following:

a) the import of goods,

b) tax-exempt transactions ineligible for tax deduction,

c) transactions pursuant to Section 69 of the VAT Act,

d) transactions where a taxpayer or an identified person for whom the transaction is carried out is required to accept tax liability, or

e) the provision of a service to which a special 'one-stop-shop' scheme applies.

A foreign person makes a tax-refund claim by submitting a tax-refund application to the Prague Capital City Finance Office on a printed form issued by the Ministry of Finance, on which it is stated that such an application may not be submitted electronically.

The foreign person must:

a) complete the application form in Czech,

b) provide supporting tax documents issued by a taxpayer,

c) provide evidence in the form of a certificate issued within the preceding twelve-month period by the competent tax administration in the country in which the foreign person is registered and stating that the applicant is a person registered for value-added tax or some other, similar tax in a third country,

d) certify by means of a written declaration that, in the period for which he/she is applying for a tax refund, he/she fulfilled the conditions laid down in paragraph 1.

The period for which a tax refund is requested must include at least three consecutive calendar months in a calendar year but not more than one calendar year. The tax-refund period may be shorter than three months only if it covers the final part of a calendar year. A tax-refund application covering the final part of a calendar year may also include purchases of goods or services (or imports of goods) which were not included in previous applications but which relate to the calendar year in question. An application may not include a tax refund relating to previous calendar years. A tax-refund application for a given calendar year may be submitted up to 30 June of the following calendar year, after which the entitlement to a refund will expire.

A foreign person who is entitled to a tax refund will receive it within six months of the date upon which he/she submitted the application or upon which any errors in the application were rectified. The refund will be paid as an amount rounded to the nearest full crown. The tax administrator will refund the approved amount to the account indicated in the tax-refund application. The approved amount will be refunded in the Czech Republic or in any other State; in the latter case, any transfer charges must be paid by the foreign person.

Tax will be refunded if it amounts to:

a) at least CZK 7 000 for a period of less than one calendar year but not less than three months, or

b) at least CZK 1 000 for a period of one calendar year or a period of less than three months, if this is the final part of a calendar year.

For the purposes of a tax refund, a foreign person is regarded as a taxable entity.

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