For retailers that intend to start a business in e-commerce in Czechia – only for Czech customers (without import to the other EU Member States), all necessary rules must be followed in order to issue invoices correctly.
It is already known that even before the pandemic, Czechs used to buy online and that the turnover of Czech's e-shoppers increased by 40 billion in 2020.
In the following, we unveil which rules must be followed to issue e-invoices correctly.
Rules to be followed when it comes to e-business in Czech Republic
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DEMO country
Author: Kristina Dosen
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General information
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667
Content accuracy validation date:
27.07.2021
Content accuracy validation time:
08:45h
Retailers who are preparing to start the business in e-commerce in Czechia must choose the right technical solution, establish a relationship with suppliers and order deliverers, and, among other important steps – they have to solve invoicing.
A correctly issued invoice is necessary, especially in a situation where retailers trade with business entities – in this case, the invoice is a must. Retailers do not have to issue invoices to their regular customers who are private individuals unless the customer requests a document, and this rule applies to e-commerce sales, as well. All a retailer has to do is to pay the VAT – if it is a VAT payer, enter it in the VAT register and the control report. However, e-shop operators in Czechia usually provide these documents to all customers.
Of course, specific rules for issuing invoices vary depending on whether the Czech retailers keep accounts and whether they are VAT payers.
In case that the retailer is a non-payer of VAT without accounting, invoicing is the easiest: the retailer will issue a document for an amount excluding VAT and it doesn’t matter if they are intended for entrepreneurs or natural persons. The invoice must contain the designation “I am not a VAT payer” and other information provided by Civil Code:
- Name and surname (in case of self-employment);
- Company name,
- Registered office,
- ID,
- Designation in the register in which the retailer is a management entrepreneur (e.g. commercial register, trade register, etc.).
It is desirable for Czechs retailers to facilitate the process of any control from the Tax Administration, by adding the following information:
- Word and number (e.g. Invoice 20210720)
- Description of goods or services
- Amount (total and possibly by individual items) and
- Invoice date.
In case that the retailer is a non-payer of VAT who keeps accounts, they must be more careful. Part of the obligation applies to both groups of non-VAT payers, so the retailer must not forget the above-mentioned data set by the Civil Code. However, the retailer can follow the Accounting Act when issuing the invoice, which means that invoices must include:
- Designation of the accounting document,
- The content of the accounting document,
- Information on the participants in the transaction,
- The total amount (or the amount per unit of measure and its quantity),
- Date of issue of the accounting document,
- The date of the accounting event (if it is different from the date of issue of the invoices),
- Signature of the responsible person.
It is important to always add VAT to the final price of the product or service – the basic rate is 21%, while reduced is 15% and 10%.
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