Czech VAT 2025: “No Pay, No VAT” Rule Explained (6 Month Deadline for Input VAT)

Czech VAT change from 1 January 2025: what’s new?

From January 1 2025, Czech VAT 2025 law “No Pay, No VAT”introduces a practical cash-flow rule often summarized as “No Pay, No VAT.” 

Under §74b of Act No. 235/2004 Coll., if you claimed input VAT on a supplier invoice but don’t pay it within 6 months after the invoice due date, you must reverse (return) the claimed VAT to the tax office.

Key points in plain terms

• No supplier credit note is needed. You adjust the VAT yourself.

  
  

• Partial payment = partial reversal. You reverse VAT only on the unpaid portion.

  
  

• Pay later? You can reclaim input VAT again—but typically only within 2 years (watch the time limit).

Who is affected most by the “No Pay, No VAT” rule?

B2B buyers (most impacted)

If you’re a VAT-registered business buying from another business, this rule directly hits your cash flow. Input VAT that you expected to keep can boomerang back to the state if you don’t pay on time.

B2C buyers (little to no impact)

Consumers don’t claim input VAT, so the rule generally doesn’t apply in B2C situations.

What about sellers? The mismatch problem

Here’s the uncomfortable part: while the buyer may have to return input VAT after 6 months, the seller usually still has to pay output VAT under the normal rules—unless they later qualify for bad debt relief under separate provisions (for example §46).

Practical result: for a period of time, both sides may be financing VAT on an invoice that hasn’t been paid.

Why did Czech VAT rules change?

The change aligns with EU-level thinking and case law (including CJEU case C‑335/19). The goal is to prevent the state from effectively funding unpaid invoices and to reduce abuse where invoices are claimed but never settled.

In short: either pay your supplier, or give the VAT back.

How does Czechia compare with neighboring countries?

• Slovakia: stricter timing — VAT adjustment after 100 days unpaid

• Poland: even stricter — 90 days, with consequences if you don’t adjust

• Austria & Germany: no fixed “X-day” deadline; relief usually comes only when the debt is truly uncollectible (often much later)

  
  

What it means in practice (checklist for 2025)

• Treat 6 months after the due date as a VAT deadline, not just an accounting detail

  
  

• Expect stronger payment pressure from suppliers (your VAT deduction depends on payment)

  
  

• Prepare for awkward but real conversations: “Please pay—otherwise I’m funding VAT twice.”

  
  

• Consider whether cash accounting becomes more attractive for SMEs (VAT tied more closely to actual payments)

  
  

Final thought: should VAT be symmetric on unpaid invoices?

This amendment isn’t mainly about fairness between buyer and seller—it’s about protecting VAT revenues. The open question remains:

If the buyer must reverse input VAT after 6 months, shouldn’t the seller get automatic output VAT relief for the same unpaid invoice?

A symmetric approach would make VAT more neutral when payments collapse. Until then, the only guaranteed winner is the tax office.

What’s your view—should Czech VAT introduce automatic seller-side relief when the buyer loses the deduction?

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