The Czech Ministry of Finance wants to ask the European Commission for an increase of the VAT exemption to small businesses from one million CZK to CZK 2 million. It wants to introduce this increase before the European VAT Directive will be effective.
The VAT directive allows member states to decide to raise the limit to up to € 85,000 from 2025. This change will significantly change the conditions for the VAT registration in the Czech Republic. Obtaining an exemption to the earlier increase, the ministry said, should result in a reduction of administrative costs and increase the number of freelancers who will be able to benefit from the flat-rate tax. The Ministry also points out that this limit was not increased for more than 17 years and thus does not respond to the change in price levels.
If the exemption is granted, it would like to raise the limit as early as next year. It now estimates that it should reduce the number of VAT payers by around 105,000.
Nevertheless the businesses not having their seats in the Czech Republic cannot benefit from this change because they are usually obliged to register to the Czech VAT because of the first transaction which is taxable in the Czech Republic.
Yourtaxes.cz – Your VAT registration in the Czech Republic
Remote work from the Czech Republic has become often: Czech employees work from their home for an employer with the head office in another country. For companies with staff based in the Czech Republic, the key question is whether this location can qualify as a “fixed place of business” and thus as a permanent establishment in the Czech Republic.
The filing deadline for Czech corporate tax returns for 2024 passed in June 2025, and in practice the increase of the corporate tax rate from 19 % to 21 % clearly showed its impact.
If you are considering the question of which country is advantageous from a tax point of view to import goods into the European Union, then you need to consider in particular which country a fiscal representative is required and how VAT is charged on imports into the EU. In both aspects, the Czech Republic is an ideal choice.