The Czech Republic is an EU member state. The EU states together form a customs union, which is why it is generally permitted to import and export goods for private use without paying customs duties or other taxes within this union. There is no restriction on the value of the goods.
In order to ensure that the goods are really imported or exported for private use, the states can limit the import and export. In the Czech Republic, there are restrictions on goods that are subject to excise duty. These are mainly alcohol, tobacco and other stimulants. These goods are subject to import/export limits, and there is also a condition that the goods may not be resold.
Nevertheless, for the export or import from/to the Czech Republic to/from all other EU countries there is no customs duty, only a kind of import VAT.
Limits for the transport of tobacco products and alcohol in the EU
- 800 pieces cigarettes
- 200 pieces cigars
- 1 kg tobacco
- 10 litres of distillate
- 20 litres of liqueur wine
- 90 litres of wine, from which a maximum of 60 litres of sparkling wine may be made
- 110 litres of beer
Import VAT in the Czech Republic
The businesses with the seat outside the EU can import their goods to the Czech Republic without limits. If they have a Czech VAT identification number, they can declare their import VAT in their Czech tax returns. The import of goods with the place of supply in the Czech Republic is always subject to VAT regardless of whether it is carried out as a transaction for consideration or not, or whether it is carried out in connection with the economic activity or not. It does not matter which person imports the goods, whether a taxable person or a non-profit entity or a citizen. The only condition imposed by the law is that such import has a place of supply in the Czech Republic.
Even in the case of importation of goods involving more than one entity, it must be borne in mind that in the case of several consecutive supplies connected with a single transport, the transport must/can be attributed to only one of the supplies made and the remaining supplies will constitute supplies of goods without transport for VAT purposes. Thus, when importing goods into the Czech Republic with the participation of several entities, one or even several of them may be obliged to register for VAT in the Czech Republic.
How is the import VAT declared?
The obligation to declare or pay import VAT on the importation of goods arises when the goods are placed under a customs procedure free circulation. Thus, if the goods are imported and transported to the Czech Republic under the customs transit procedure and released for free circulation here, the place of supply for the imported goods is the Czech Republic.
The reverse-charge applies on the import VAT. This practically means that the taxpayer is obliged to calculate the import VAT himself and to include it in his VAT return for the tax period in which the goods were placed under the regime of free circulation. The method of calculating the taxable amount for the importation of goods is set out in the Czech VAT Act.
A big advantage is, that the importers do not have to pay any import VAT in the Czech Republic. This can be a big advantage for businesses importing goods to the EU via the Czech Republic and also their motivation to ask for the VAT registration here. For more information about the VAT registration in the Czech Republic please see our blog. You can find there also more information about the Czech VAT.
Tax documents relating to import VAT
The tax invoice for the import VAT is the decision of the customs office on the release of goods under the customs procedure under which the obligation to declare or pay tax arose (e. g. free circulation), or another decision on the tax levied issued by the Czech customs office.
The indirect representative can view and save that decision in his software application. In most cases, this decision is displayed and stored in a XML format including the electronic signature of the customs office. If the indirect representative forwards this document to the importer, it could generally be considered as a tax document when importing the goods. The question is whether this message fulfils the 'general' conditions for keeping tax documents (ensuring the authenticity of the origin of the documents, the integrity of their content and their legibility).
Tax base for import VAT
The tax base for the calculation of import VAT is the sum of all items defined in the Czech VAT Act. The most important item shall be the customs value determined in accordance with the customs regulations of the European Union. In accordance with the provisions of Article 70 of the Union Customs Code, the customs value shall be primarily the price actually paid or payable for the goods sold for export to the customs territory of the EU, adjusted, where appropriate, in accordance with Articles 71 and 72 of the Union Customs Code. Where the conditions laid down in Article 70(2) of the Union Customs Code are not met and the customs value cannot be determined in this way, the customs value shall be determined by one of the supplementary methods of determining the customs value provided for in Article 74 of the Union Customs Code.
Furthermore, import duties and other charges payable by reason of importation which have not been included in the taxable amount shall enter into the taxable amount.