Draft EET 2.0 Amendment Introduces Earlier VAT Corrections for Bad Debts and Expands Reduced VAT Rate for Catering

Summary

Earlier and broader VAT relief for bad debts: The draft amendment raises thresholds for “minor receivables” and allows VAT base correction sooner from the creditor’s perspective.
Faster input VAT adjustment for debtors: The current six‑month deadline for correcting deducted VAT on unpaid invoices would be shortened to three months.
Reduced VAT rate extended to beverages in catering: All non‑alcoholic beverages served as part of catering services would fall under the reduced VAT rate.
[dreport.cz], [kdpcr.cz]

Detailed analysis

Background and legislative context

In February–March 2026, the Czech Ministry of Finance published the first draft of an amendment to the Act on the Registration of Sales (EET 2.0), accompanied by changes to several tax laws, including the VAT Act. The proposal has been submitted to the interministerial consultation process and is intended to modernise the sales registration framework while simultaneously adjusting selected VAT rules.

The Ministry has indicated that the amendment should become effective on 1 January 2027, subject to the completion of the legislative process. [svaz-ucetnich.cz], [dreport.cz]

Increased limits and earlier VAT base correction for bad debts

A central element of the draft is the reform of VAT adjustments relating to uncollectible receivables. From the creditor’s perspective, the amendment:

Increases the thresholds for so‑called “minor receivables”, allowing simplified VAT base corrections for small outstanding amounts; and
Permits VAT base corrections earlier than under the current rules, reducing the time creditors must wait before reclaiming VAT paid on invoices that remain unpaid.

These changes are intended to ease cash‑flow pressure on businesses, particularly SMEs, and further align Czech practice with CJEU case law, which requires that VAT should not be definitively borne by taxable persons where consideration is not received.
[dreport.cz], [kdpcr.cz]

Shorter deadline for debtor-side VAT deduction correction

On the debtor side, the proposal introduces a stricter timeline. Under the current VAT Act, a debtor must reverse deducted input VAT where an invoice remains unpaid six months after its due date.

The draft amendment would halve this period to three months, accelerating the obligation to adjust previously claimed deductions on overdue payables. This change is designed to:

Improve payment discipline;
Reduce asymmetries between creditor and debtor VAT treatment; and
Strengthen the neutrality of the VAT system by limiting prolonged VAT benefits on unpaid liabilities.

The Ministry’s explanatory materials emphasise that this measure complements the new bad‑debt correction rules applicable to creditors.
[dreport.cz], [kdpcr.cz]

Extension of reduced VAT rate to beverages in catering services

The amendment also contains a sector‑specific VAT rate change affecting the hospitality and catering industry. Currently, different VAT rates may apply depending on whether food or beverages are supplied.

Under the draft proposal, the reduced VAT rate would apply to the serving of all beverages, provided that:

They are non‑alcoholic; and
They are supplied as part of a catering service.

The aim is to simplify VAT rate application in practice and eliminate disputes over mixed supplies in catering, which have historically been a source of interpretative uncertainty. [dreport.cz], [svaz-ucetnich.cz]

Outlook and next steps

The proposal is still at a draft stage and may be amended during the legislative process, including in response to comments submitted by professional bodies such as the Chamber of Tax Advisers of the Czech Republic.

If adopted as planned, businesses will need to: