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News Amendment to Act on Electronic Record of Sales and Amendment to VAT Act

The Chamber of Deputies is currently discussing the first hearing of a government bill amending certain provisions of Act No. 112/2016 Coll., on Electronic Record of Sales, as well as Act No. 235/2004 Coll., on Value Added Tax.

 

The main changes to the ERS Act include, for example, a possibility to record sales in a special regime for personal income taxpayers with an income of up to CZK 200 000 subject to ERS, who meet certain conditions (max. 2 employees, natural person must not be a VAT payer). Another change suggested is extending the range of services excluded from the ERS duty by telecommunication services, income from gambling or commercial air transport and directly related services.  

 

The amendment also specifies that ERS does not apply to prepaid cards, multisport cards and other types of electronic cash.

 

The implementation of third and fourth stage of ERS (i.e. ERS for all remaining businesses), was adjourned indefinitely by the decision of the Constitutional Court. The third and fourth stages are now back in the game and should be in force from the seventh calendar month after the amendment becomes effective. Considering the length of the legislative process, the aforementioned changes should come into force in mid-2019 at earliest.  

 

At the same time, reduced tax rate is being proposed for certain services and goods. To be more specific, the lower rate of 10% should apply e.g. to water and sewage fees, catering services and some craft and professional services (hairdressers, barbers, repairs of bicycles and footwear, etc.)  Another tax rate reduced from 21% to 10% is the one for draught beer. The suggested effective date is once again from the seventh month after the amendment becomes effective.

 

Since this is only a bill, it is quite probable that the final version will be slightly different. We will keep you informed on further legislation changes in this area.