Czech Republic moves VAT registration to a calendar-year test with a new CZK 2,536,500 ceiling

What changed in detail

Act No. 461/2024 Sb., published in the Sbírka zákonů on 23 December 2024, amended the Czech VAT Act (No. 235/2004 Sb.) from 1 January 2025. The amendment accompanies the EU small-business scheme. The General Financial Directorate explains it in its Information on changes to VAT payer status and registration from 1 January 2025 (Č.j. 11977/25/7100-30118-203500).

Calendar-year test. Turnover for mandatory registration under § 6 is now measured per calendar year, no longer over any 12 consecutive months.

Two figures. The CZK 2,000,000 threshold is unchanged, and a new ceiling of CZK 2,536,500 applies alongside it. Crossing either one makes a person a VAT payer; only the start date differs:

• Crossing CZK 2,000,000: the person becomes a payer on 1 January of the following year. It may instead choose, in a timely registration application, to become a payer from the day after the threshold was crossed.
• Crossing CZK 2,536,500: the person becomes a payer on the day after crossing it.

EU SME scheme. The Act also brings in the cross-border small-business scheme under Directive (EU) 2020/285. Businesses established in other member states can use the Czech small-business exemption.

What it means

The calendar-year test and the two figures are still in force. The common misreading of this reform was that the threshold rose to about CZK 2.5 million. It did not. CZK 2 million still triggers registration, and crossing it only defers the start to 1 January. The higher figure is a ceiling that brings payer status forward to the next day, so a business that grows quickly late in the year can become a payer mid-year.