The Czech Republic has announced it will amend the Value Added Tax (VAT) Act to include a VAT base correction period extension and changes to the rules for correcting the VAT base.
The VAT base correction period has been extended to seven years, except for advances, which remain at three years. Additionally, the time limit for claiming VAT deductions is now two years.
The rules for correcting the VAT base for irrecoverable debts have been modified, and now the debtor no longer needs to be a VAT payer as long as they were at the time of the unpaid supply. The amendment also allows automatic correction for “small” debts (up to CZK 10,000) that are six months overdue.
Earlier, the Czech Senate passed the Bill on Amendments to the Value Added Tax Law on 11 December 2024, which amends the VAT Law to incorporate the Amending Directive to the VAT Directive (2020/285) of 18 February 2020. This includes a special scheme for small enterprises for cross-border supplies and VAT registration threshold, etc.
