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Small businesses from the EU are likely to get an exemption regarding VAT registration

by AI | 30.Oct 2024 | Europe in brief AI

The novel transposes the European directive into Czech law, which should allow small businesses based in another EU member state to use the exception.

Woman at the computer. Photo: Mohssen Assanimoghaddam/dpa

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Prague – Small companies based in another EU member state that do not exceed a turnover of two million crowns per calendar year would newly not have to fall under the VAT regime. They will thus be able to use the non-VAT payer status in a member state other than their home state. This is envisaged by the amendment to the VAT Act, which was approved by the Chamber of Deputies today.

According to the explanatory memorandum, in addition to the domestic regime for small businesses, the amendment introduces a so-called cross-border regime. Under the current law, Czech companies whose turnover in the last 12 months does not exceed two million crowns are not subject to obligations related to VAT, such as control reports or tax payments. Companies based abroad are subject to VAT obligations from the first transaction carried out in the Czech Republic.

The amendment transposes into Czech law a European directive that should allow small companies based in another EU member state to also take advantage of the exception. The directive will also allow small Czech companies under the same conditions to use the non-VAT payer regime in other EU countries. (October 30)

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