Czech VAT reverse charge on domestic supplies
The Czech authorities are proposing to amend the VAT Act to apply the reverse charge on domestic supplies of goods by non-resident businesses to Czech VAT registered businesses.
The proposal is to introduce the new rule in July 2016.
Currently, non-residents must VAT register themselves in the Czech Republic for buying and selling B2B. The new proposal would withdraw this requirement. Instead, under the reverse charge mechanism, the customer becomes liable for recording the sale and purchase for VAT purposes, and so there would be no cashflow impact.
Where the non-resident is already Czech VAT registered, for example if they are doing intra-community supplies or imports, they will continue to be responsible to charging and remitting the VAT.
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