VAT refunds post-Brexit

From 1 January 2021, the rules on tax refunds to taxable persons registered for tax in another member state do not apply to UK entities. Instead, the rules on tax refunds to foreign taxable persons based on the reciprocity principle will apply.

The reciprocity principle is met if the state in which the foreign person has their registered office either does not assess value added tax or a similar general consumption tax, or if such tax is refunded to taxable persons established in the Czech Republic in the amount previously collected.

The Czech Republic does not publish a list of countries that meet the reciprocity principle. However, on 18 May 2021, the General Financial Directorate issued its Information on the refund of value added tax to taxable persons established in the United Kingdom of Great Britain and Northern Ireland after the end of the transitional period. According to this information, the reciprocity principle has been met, and taxable persons with their registered office or place of residence in the United Kingdom may claim tax refunds.

Foreign persons may claim the refund by applying to the Tax Authority for the Capital City of Prague in Czech and using the prescribed printed form.