Warehouse and VAT

Warehouse in the Czech Republic or Slovakia - traders and VAT number and return

Traders can increase their profits by reducing costs. One way how to do this is to store and ship goods in the Czech Republic or Slovakia.

There are different types of warehouses - the goods can be sold through Amazon, for example. Amazon has warehouses not only in Germany but also in France, Italy, Poland or the Czech Republic and it offers them to its online merchants as part of the Pan-European FBA program. The same applies to About You, for example. About You also provides its partners with storage facilities for shipping in Germany as well as in Slovakia (DUN - Dunajská Streda). In this way, online retailers can optimise transport costs for shipments throughout Europe. 

If you are an online trader and store your goods internationally, you have to take care of your VAT in the respective country. Under both Czech and Slovak tax law, storage in the Czech Republic or Slovakia very often results in the obligation to register for VAT and get the Czech or Slovak VAT number. After this, the trader must submit the VAT return in the Czech Republic or Slovakia.

How does storage in a warehouse in the Czech Republic or Slovakia work?

In the first step, the goods must be delivered from the country of the online trader (e.g. Germany, Austria, etc.) to the Czech Republic or Slovakia, an alternative option is the import from third countries. In this case, the trader sends the goods to the Czech Republic without a transfer of ownership. The trader simply sends the goods to himself. This operation is called an intra-Community transfer and must be declared in the VAT return in the country from which the goods are sent to the Czech Republic or Slovakia.

If the goods are already in the Czech Republic or Slovakia and are stored here, this is a so called intra-Community acquisition. This intra-Community acquisition must be declared in the Czech Republic or Slovakia in the VAT return and Control statement. In most cases, the tax liability for the intra-Community acquisition will be zero, as the trader can claim the same amount of the VAT refund. Nevertheless, the respective state must be informed about the transaction via a VAT report.

Distance sales from the Czech Republic or Slovakia

The subsequent shipment from the Czech or Slovak warehouse to end customers must be recorded in the Czech or Slovak VAT return. This also applies if the trader is registered with OSS in his home country and reports the shipments via OSS. The difference is only in which line of the Czech or Slovak advance VAT return the shipment is listed and whether the tax liability in the Czech Republic/Slovakia arises in the Czech/Slovak VAT return or whether it arises under the OSS return.

The storage and dispatch of goods in the Czech Republic or Slovakia very often gives rise to the VAT registration obligation. On the one hand, international storage can reduce transport costs, but on the other hand, related tax obligations in the respective countries must also be taken into account.

Import to warehouse in the Czech Republic and VAT

The Czech Republic and Slovakia are becoming increasingly popular as a good location for international traders' warehouses. This concerns, for example, traders who import their goods to the Czech Republic from third countries and subsequently sell them locally or to the EU. The reason is that the import to the Czech Republic is declared in reverse charge - i.e. the VAT is declared, but the VAT refund is claimed at the same time. Practically it means that there is no import VAT in the Czech Republic.

For traders it means that imports are not associated with any cash-flow disadvantage in the Czech Republic. This advantage, together with the favourable conditions for storage and transport, means that traders can reduce their logistics costs.

However, they must apply for the VAT number in the Czech Republic, or in Slovakia.

Yourtaxes.cz - Your partner for VAT in the Czech Republic and Slovakia