VAT from January – what’s new and what remains unchanged?
This new year brought only a few changes: the end of the waiver of VAT on supplies of electricity and gas; major differences in VAT for tour operators; and simplified Intrastat reporting. In contrast, the amount of turnover for statutory VAT registration shall remain unchanged in 2022.
Following the energy crisis, the previous finance minister decided to waive VAT on supplies of electricity and gas effected in November and December 2021, or on the advance payments received during this period. The current government decided not to extend the waiver. Thus, starting from the first of January, these supplies are again subject to tax at 21%. We will continue to monitor whether the new government will submit a proposal to reclassify these items to a reduced rate during the year to combat the ongoing energy crisis. So far, however, its current policy statement makes no mention of this.
The finance ministry also did not extend the waiver for filter half masks and respirators of protection class FFP2 and higher, which therefore ended on 31 December 2021. A VAT waiver continues to apply to diagnostic medical devices for COVID-19 testing and to vaccines, so far until 31 December 2022.
Changes are also awaiting tour operators. For instance: the abolition of the possibility to calculate VAT on travel services provided from the aggregate data for the taxable period, or the introduction of the duty to pay VAT on advances received for travel services. We reported on these changes in more detail here.
From January 2022, a simplified Intrastat reporting is being introduced. To use it, the precondition is that the entity has not exceeded the limit of CZK 20 million in twelve consecutive months in terms of receipts or dispatches of goods from or to another EU member state. The advantage is that under the simplified reporting, Intrastat data may only be reported once a year. However, selected commodities (listed in the Czech Statistical Office’s notice) cannot be reported under the simplified regime.
What remains unchanged for the calendar year 2022:
- VAT rates: except for some healthcare items reclassified to a reduced rate.
- The amount of turnover for VAT registration remains at CZK 1,000,000; an increase to CZK 2,000,000 will only occur in subsequent years.
- Electronic reporting of sales: The duty to electronically report sales remains suspended until 31 December 2022. A decision on its full abolition should be taken in the course of 2022.