Czech Republic Enacts New VAT Rules for Unpaid Invoices Starting January 2025

• New VAT rules in the Czech Republic start January 2025.
• Businesses must reduce VAT deductions on unpaid invoices overdue by six months.
• Recovery of VAT is possible if the debt is later paid.
• The six-month period begins at the end of the month when the invoice is due.
• Applies to taxable supplies received from January 2025.
• Deduction reduction is proportional to the unpaid amount.
• Exemptions include quarterly VAT payers if debt is settled within the same quarter.
• Reverse charge transactions and intra-Community acquisitions are excluded.
• Mutual offsetting of receivables is considered payment.
• Adjustments must be recorded in VAT returns and control statements.
• Businesses need to track overdue debts and adjust accounting systems.
• Reflects a shift in VAT compliance across the EU.

Source: marosavat.com

Note that this post was (partially) written with the help of AI. It is always useful to review the original source material, and where needed to obtain (local) advice from a specialist.

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