A VAT payer is a person who makes taxable supplies as part of their business activity. VAT registration can be mandatory or voluntary (based on your own application). It is mandatory if turnover for a maximum of 12 consecutive months exceeds 1 million CZK (about 46,000 USD). The person must submit a VAT registration application within 15 days after the end of the calendar month in which they exceeded the turnover. The person becomes a VAT payer from the first day of the second month following the month in which they exceeded the turnover. If you become a VAT payer, you will have your own tax identification number (DIČ). The DIČ is valid throughout the EU.
When is it worth being a VAT payer?
- if most of your customers are VAT payers
- if you have higher expenses than income for purchased goods, the state refunds the business the difference between the two VAT amounts
- the goods you buy from a supplier are subject to a higher VAT rate than the goods you sell to customers
When is it not worth being a VAT payer?
A major disadvantage for VAT payers is the demanding administration. A VAT payer must issue tax documents to their customers, keep records, file VAT returns and submit VAT control statements. By law, tax documents and records must be kept for 10 years. Being a VAT payer is also a disadvantage:
- if your customers are not VAT payers
- if a lower VAT rate applies to goods bought from a supplier and a higher VAT rate applies to goods sold to customers
How can I find out who is a VAT payer?
You can find out who is a VAT payer using the register of VAT payers provided by the Ministry of Finance of the Czech Republic, or through the ARES web application, which is also provided by the Ministry of Finance of the Czech Republic.
Register of VAT payers
To give an overview of VAT payers, a register of VAT payers was created, where you can search for and check data on VAT payers published by the Ministry of Finance of the Czech Republic. To search for an entity, you need to enter its tax identification number. You can also search by business name, first name and surname, birth number (rodné číslo) or business ID number (IČO).
ARES register
You can also use the ARES system (Administrative Register of Economic Subjects), which provides access to data on economic entities registered in the Czech Republic. You can search for legal entities by company name or identification number. You can find individuals by entering their name.
Who is an unreliable VAT payer?
Under the VAT Act, a VAT payer who seriously fails to meet their obligations relating to tax administration is classed as an unreliable payer. A business can be classed as an unreliable payer if it:
- has a VAT debt of at least 500,000 CZK (about 23,000 USD)
- took part in transactions for which the tax authority, due to a justified concern, issued a security order that was not paid on time
- had an underpayment of tax of at least 500,000 CZK (about 23,000 USD) recorded for at least 3 consecutive calendar months
- repeatedly breaches its obligations, resulting in tax being assessed or additionally assessed using indirect methods
- does not respond to requests and does not provide the necessary information
- gives false information about the company’s actual registered office
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USD amounts are approximate, converted at the Czech National Bank rate of 21.80 CZK per USD on 2 October 2026.