We flew to Prague for you and met with the two tax advisors Dr. Schaffer and Mr. Felenda from the firm of Schaffer and Partner s.r.o., Prague. The discussion focused on the specifics and the handling of tax issues of German Amazon retailers with warehouses in the Czech Republic that participate in Amazon's EFN or PAN-EU network.
1. tax registration in the Czech Republic, yes or no?
Absolutely. As is the case in most European countries, anyone who maintains a permanent establishment (Amazon warehouse) in the Czech Republic and makes online sales from it must also register and pay taxes in the Czech Republic. In order to do this, you will not be able to avoid registration.
2. how does the registration work?
First and foremost, you need to collect a number of documents. These include, for example, a certified copy of your identity card, a certified copy of the extract from the commercial register (if available) and confirmation from the tax office that you are indeed an existing company. In general, the certification must be done by a notary public. In some countries, the so-called apostille is also necessary. This is used by the regional court to confirm that the certifying notary also exists. In the Czech Republic, however, we can do without this.
The collected works must then be translated into Czech and submitted to the Ostrava Tax Office together with the application for a tax number. This process is ideally carried out by a local tax advisor, who will then also be available to answer any questions on the part of the tax office.
Due to a recent change in the tax office responsible for issuing tax numbers, there may be long processing times at this time. So plan your entry into the EFN or PAN-EU Network very early.
3. the tax number is there, what comes next?
With the issuance of the tax number, sales from the Czech Republic can be carried out for the first time. Anyone who has hastily checked the box at Amazon and has already made sales should also contact us in advance. We will then coordinate the corrections in Germany and the Czech Republic with the responsible tax advisors.
4. order in, goods out, invoice behind!
Invoice? Yes Invoice! In the Czech Republic it is obligatory to issue an invoice for mail order sales. This even contains a few more requirements than our German invoice. For example, in addition to the usual data for deliveries in the B2B area, the VAT ID of the customer and the supplier must always be indicated. Furthermore, all invoices must be issued in Czech and in Czech crowns.
5. the reporting of the sales tax
Advance VAT returns are different throughout Europe. But in the Czech Republic, this comes with a total of 3 forms, these can be filled out and sent online, but are only available in Czech. So if you don't speak first-class Czech, you should rely on your tax advisor here as well. Various methods can be used to transfer the sales figures. The simplest and least error-prone is the transfer of the processing data and the sales lists. In addition, the first paper invoice should also be submitted for the first registration; this must comply with the specifications already mentioned above.
6. delivery threshold and opting
As in all countries, the delivery thresholds must be monitored for Czech sales and the results must be included in the tax assessment. For example, after exceeding the delivery threshold for Germany (€100,000.00), the sales are no longer taxed in the Czech Republic, but in Germany. Those who do not want to wait that long can take the shortcut: This would be the so-called opting for the delivery threshold. In this case, you declare to the tax office that you waive the application of the delivery threshold and that all sales from the Czech Republic to Germany are henceforth also taxable in Germany.
When does opting out make sense? Whenever the tax rate in the recipient country is more favorable than that of the sender country. In our case this would be: Germany 19% < Czech Republic 21% Important: Opting for this does not exempt you from the obligation to file a VAT return. Parcels shipped from the Czech warehouse to other countries may still trigger taxes.
7. an audit of the tax office
Audits by the Czech tax office are usually carried out in the same way as in other European countries. The documents are requested from the company or the tax representative and then checked at the tax office. The documents must then be complete and in the Czech language. It is strongly recommended to have the audit accompanied by a local tax advisor.
Conclusion:
The process is comparatively simple in the Czech Republic. However, if you don't speak Czech, you will need to consult a local tax advisor. Even if you check the box for Amazon's network too early, you will get off relatively lightly in the Czech Republic. Nevertheless, we strongly advise you to first find out about the tax peculiarities in the countries, then register and only activate the Amazon Network once you have received your tax number. Once the first sale has been made from the Czech warehouse, there is no going back.
AccountOne:
AccountOne not only takes over the generation of Czech sales, but also reports them to the responsible tax advisor. In addition, we perform the tax registration in the Czech Republic and ensure the timely payment of applicable taxes with our cash pool. In case of late registration, we coordinate the correction in Germany and the Czech Republic.
