Czech VAT 2025: No Pay, No VAT Play

New Rule in a Nutshell:

From 1 January 2025, Czech VAT law (§74b of Act 235/2004 Coll.) says: if you’ve claimed input VAT on an invoice and don’t pay it within 6 months after due date, you must give the VAT back to the tax office.

• No supplier credit note needed – you simply reverse it yourself

• Partial payments? Then you reverse only the VAT on the unpaid slice

• Pay later? You can reclaim it (but only within 2 years)

  
  

Who’s Hit the Hardest?

• B2B buyers: Cash-flow tight? Too bad. The VAT you thought you’d safely deducted now boomerangs back to the state.

• B2C buyers: No input deduction anyway, so the rule doesn’t bite here.

  
  

And Sellers? Here’s the kicker: while buyers must return their VAT credit after 6 months, sellers still owe output VAT right away – unless they can later prove the receivable is a “bad debt” under separate rules (§46). Translation: for a while, both sides may be funding the state on a deal that never got paid.

Why the Change? Brussels gave the nod (CJEU case C-335/19). The Czech taxman doesn’t want to bankroll your unpaid bills, nor subsidize creative fraud where invoices never get settled. This forces buyers to either pay suppliers or lose the cash-flow perk.

What about Czech Republic neighbors?

Slovakia: Harsher – refund VAT after 100 days unpaid

Poland: Even harsher – 90 days, with penalties if you “forget”

Austria & Germany: Kinder – no fixed deadline. Relief comes only if the debt is truly uncollectible (often years later).

Czech VAT 2025: No Pay, No VAT Play

What It Means in Practice:

• Mark your calendar: six months after due date is now a tax deadline

• Expect suppliers to push harder for payment (your VAT credit depends on it)

• Expect some delightfully clumsy coffee chats: “Dear Customer, pay me now, or at least pay the tax office back.”

• Cash accounting suddenly looks sexier for SMEs – VAT only when you actually get paid

Final Thought:

The amendment isn’t about fairness between buyer and seller; it’s about keeping the state’s VAT purse plump. For companies, the morale is clear: settle invoices on time or you’ll be financing both your supplier and the taxman.

But here’s the open question:

If the buyer loses input VAT after 6 months, shouldn’t the seller also get automatic relief on their output VAT for the same unpaid invoice? 

A symmetric rule would finally make VAT neutral when payments collapse – until then, the taxman is the only party smiling.

What do you think?

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