Czech VAT Act imposes new requirement for certain foreign businesses to appoint representative to receive correspondence from Czech tax authorities

• A recent change to the Value Added Tax (VAT) Act requires entities that are established outside the European Union (EU) and have registered for VAT in the Czech Republic to appoint a representative with a "Czech data box" to receive correspondence from tax authorities.
  
• Any affected entity currently registered for Czech VAT must appoint a representative by 28 February 2025 or face daily sanctions.
  

An amendment to the Czech VAT Act, which was published in the Collection of Laws at the end of 2024, introduces a new obligation for taxable persons that are established outside of the European Union (Foreign Entities) who are registered for VAT in the Czech Republic.

Foreign Entities registered for Czech VAT will be required to appoint a representative with an established Czech data box1 in accordance with Czech law. This representative will be responsible for receiving correspondence from the tax authorities that is addressed to the Foreign Entities. Each Foreign Entity may appoint only one representative. Alternatively, Foreign Entities may establish their own Czech data box, although this could be a complicated process in practice.

Foreign Entities already registered for Czech VAT will be required to appoint their representative by the end of February 2025. Failure to meet this deadline may result in sanctions for each day of delay.

Foreign Entities should contact their tax advisors to potentially act as their representative or otherwise help ensure compliance with this new legislative obligation. Note that the tax authorities communicate solely in the Czech language, making it important for a Foreign Entity to consult a Czech-fluent tax advisor.

For additional information concerning this Alert, please contact:

Ernst & Young, s.r.o. (Czech Republic) Prague

• Martin Novak 
• Nikola Kratochvilova

Published by NTD’s Tax Technical Knowledge Services group; Carolyn Wright, legal editor

For a full listing of contacts and email addresses, please click on the Tax News Update: Global Edition (GTNU) version of this Alert.