Unofficial translation
The Ministry of Finance submitted to the government a proposal to authorize the Minister of Finance Alena Schillerová to submit an application to the European Union for an increase in the turnover limit for VAT exemption. If this application is approved, it will be possible to increase the limit for paying VAT from the current CZK 1 million to CZK 2 million.
“Thanks to the current progress in negotiations at the level of the European Commission, we can request an increase in the limit for VAT payers from one million to two million. The Ministry of Finance is currently preparing the text of the application, which we are sending to Brussels after it has been approved by the government. The intention of our proposal is to reduce administration and simplify business. Thanks to this measure, it will also be possible to increase the number of self-employed persons who will be able to use flat-rate taxes, “ said Minister of Finance Alena Schillerová.
At present, the limit for compulsory VAT payment, ie annual turnover, is CZK 1,000,000. This amount is based on an annual turnover of EUR 35,000 in national currency equivalent at the exchange rate applicable on the date of our accession to the EU. An increase in turnover above this amount is only possible on the basis of an application submitted to the European Commission and approved by the EU Council. “Our goal is to obtain an exemption to increase the current limit for exemption, for a limited period until 31 December 2024. From this date, the approved directive will follow, which provides for a limit of 2 million crowns,” said the Minister of Finance.
Last year, an amendment to the European VAT Directive was adopted, which will allow Member States to decide, at their discretion, to increase the turnover limit for paying up to EUR 85 000. However, this legislation will not take effect until 1 January 2025. “The annual turnover limit has not changed for more than 17 years, despite changes in the price level. That is why we consider it appropriate not to wait and increase this limit as soon as possible, ideally next year, “ adds Alena Schillerová. The Ministry of Finance estimates that raising the limit to CZK 2 million will reduce payers by approximately 105,000.
Source Mfcr.cz
See also Overview VAT registration thresholds (update Dec 27, 2020)
