Taxes · · 9 min read

Credit notes and corrective tax documents in Czechia

When a Czech invoice needs a corrective tax document, what it must contain, how it reaches your VAT return and control statement, and how to issue one in Taxorio.

Nobody invoices perfectly. Sooner or later something changes after the invoice goes out — the client returns the goods, you agree a discount, the order is cancelled, or an amount turns out to be wrong. In none of those cases is it enough to delete the invoice or overwrite it. The Czech VAT Act sets out exactly how a correction is made, and this article works through it.

Terminology: credit note versus corrective tax document

Three terms get used interchangeably in practice. They are not the same thing:

  • Credit note (dobropis) — the traditional commercial term for a document by which the supplier reduces an amount already invoiced. The VAT Act does not use this word.
  • Corrective tax document (opravný daňový doklad) — the statutory term, from § 42–§ 46 of the VAT Act. It is a tax document that corrects the tax base and the VAT amount.
  • Debit note (vrubopis) — the mirror image. A document by which the supplier increases an amount already invoiced.
  • Voiding an invoice (storno) — an informal term for cancelling an invoice outright. Where the invoice has already reached the client and VAT is involved, it is done by issuing a corrective document for the full amount.

For a VAT payer the term that matters is corrective tax document, because that is what the VAT Act governs and what changes your tax liability. If you are not a VAT payer, a plain commercial credit note is enough.

When a corrective tax document is required

Section 42(1) of the VAT Act requires you to correct the tax base and the tax amount in these cases:

  1. Cancellation or return of all or part of a taxable supply — the client returns goods or cancels a service order.
  2. A reduction of the tax base because of a discount — you grant an additional discount after invoicing, such as a volume rebate or a complaint settlement.
  3. A refund of excise duty — specific to traders in excisable goods.
  4. The goods or services are never supplied — the invoice went out but the supply did not happen.
  5. An advance payment is refunded — the client paid a deposit, the job does not go ahead, and you return the money.

Watch the time limit: for supplies made from 1 January 2025, you have 7 years from the end of the calendar year in which the obligation to declare the tax arose (§ 42 of the VAT Act as amended by Act No. 461/2024 Coll.). For supplies up to 31 December 2024 the original 3 years still apply. The extension to 7 years does not cover payments received — for a tax document issued on an advance payment the limit stays at 3 years. Once the limit passes, the correction can no longer be made.

What the corrective document must contain

Under § 45 of the VAT Act, a corrective tax document must show:

  1. The words "opravný daňový doklad", or anything else that makes clear this is a correction.
  2. The reason for the correction — a short description: goods returned, discount granted, order cancelled.
  3. The reference number of the original tax document being corrected.
  4. The reference number of the corrective document itself.
  5. The difference between the corrected and the original tax base — by how much the base falls, or rises.
  6. The difference between the corrected and the original tax.
  7. The usual elements of a tax document under § 29 — supplier and customer details, date of issue and so on.

Four situations you will actually meet

1. The client returns what you sold

You sold e-shop software for CZK 50,000 + CZK 10,500 VAT. A week later the client concludes it does not do what they need and you agree to take it back. The steps:

  1. Issue a corrective tax document referencing the original invoice.
  2. Show a tax base of −CZK 50,000 and VAT of −CZK 10,500.
  3. Apply the VAT correction in the return for the period in which the circumstances for the correction arose.
  4. Refund CZK 60,500 to the client.

2. You grant a discount after the fact

You invoiced monthly IT services at CZK 30,000 + VAT, and then agreed a 10 % discount for a long-term commitment.

  1. Issue a corrective tax document for the difference: base −CZK 3,000, VAT −CZK 630.
  2. Refund CZK 3,630 or net it off the next invoice.
  3. Apply the VAT correction in the relevant return.

3. The price on the invoice is wrong

You invoiced CZK 80,000 where the correct price was CZK 75,000. What you do next depends on why:

  • If this is a commercial change — you agreed a different price after the fact — issue a corrective tax document for the difference of −CZK 5,000 + VAT under § 42.
  • If the original invoice was simply wrong — an arithmetic or typing error, an amount neither of you agreed — this is not § 42 at all, but a correction of the tax amount under § 43. That belongs in an amended return for the original period and a follow-up control statement, not in a credit note. If you are in this situation, take it to an accountant rather than reaching for the credit note button.

4. Voiding the invoice entirely

You issued an invoice and then nothing happened — the job was called off before you started. Issue a corrective tax document for the full amount of the original invoice with a negative sign, which effectively zeroes it out.

Never delete or overwrite an invoice. The numbering sequence has to stay unbroken. The correct route is always a corrective document. Where a void is genuinely enough — an unpaid invoice the client never received — our guide to cancelling an invoice or issuing a credit note sets out the decision.

What it does to VAT

For the supplier issuing the credit note

You reduce your VAT liability by the tax shown on the corrective document. The correction goes into the VAT return for the tax period in which the circumstances relevant to it arose (§ 42(3)) — in practice, the period in which you agreed the return, the discount or the cancellation.

For the customer receiving it

A customer who deducted VAT on the original invoice must reduce that deduction by the VAT on the corrective document. They make the correction in the return for the period in which they learned, or should have learned, of the circumstances (§ 74(1)).

Credit notes you receive: in Taxorio, a credit note from a supplier (the input side, § 74) is recorded as a negative expense. Either upload the PDF to the inbox, where the AI recognises it as a credit note, or open the original expense and use Create credit note, then pick the scenario — return of goods, price correction or discount, or full cancellation. The negative VAT flows into line 40 of the return and into section B.2 of the control statement for documents over CZK 10,000, or B.3 below that. When the money comes back, match the incoming payment to the credit note in the Bank section.

Corrective documents in the control statement

Reporting corrections correctly in the control statement (DPHKH1) is where most of the trouble starts. The rules:

  • The supplier reports the corrective document in section A.4 (documents over CZK 10,000 including VAT, individually) or A.5 (CZK 10,000 and below, in aggregate), with a negative tax base and negative VAT.
  • The customer reports it in section B.2 (over CZK 10,000 including VAT) or B.3 (CZK 10,000 and below), again negative.
  • The number reported is the reference number of the corrective document, not of the original invoice — even though the original appears on the corrective document as a reference.

A mismatch between the supplier's and the customer's control statements on a corrective document is one of the most common triggers for a query from the tax office. Both sides need to report it in the same period. Our guide to the VAT control statement covers the sections in more depth.

The two deadlines

  • Issuing the corrective document: within 15 days of the day the circumstances for the correction arose (§ 42 of the VAT Act).
  • The outer limit: 7 years from the end of the calendar year in which the obligation to declare tax on the original supply arose (§ 42(8)), with the 3-year limit still applying to advance payments received.

Credit notes when you are not a VAT payer

The situation is simpler. You do not issue a corrective tax document — that is a VAT instrument — but an ordinary credit note: a commercial document reducing an amount you invoiced earlier. It should carry:

  • The heading "Dobropis" or "Opravná faktura" (credit note / corrective invoice)
  • A reference to the original invoice: its number and date
  • The reason for the correction
  • The amount by which the price falls, or rises
  • Identification of both parties
  • The date of issue

Tax records work on a cash basis, so the credit note reduces your income only in the period in which you actually refund the money (or in which the next invoice it is offset against gets paid), not in the period in which it was issued.

Debit notes: when the amount has to go up

The reverse case — you invoiced less than you should have. Perhaps you forgot a rush-delivery surcharge, or you agreed a higher price for extra work. What you issue:

  • As a VAT payer: a corrective tax document with positive values, increasing the base and the VAT.
  • As a non-payer: a debit note or a supplementary invoice.

The same content requirements and deadlines apply as for a credit note. In the control statement the values are positive.

How it works in Taxorio

  • A dedicated route for corrections: on the original invoice, open More actions → Correct document and pick the scenario — full cancellation, partial return, or price correction and discount. The credit note is pre-filled from the original with negative amounts, takes its own number from the DOB series, and carries the reference to the corrected document required by § 45. Nothing is retyped, and you should not use the duplicate function for this.
  • A ceiling on corrections: credit notes against one document cannot exceed it in total, and the remaining headroom shows as a meter next to the totals. On a final invoice the ceiling is the whole supply, not just the balance left after the advance was deducted.
  • Advance chains: until a final invoice has settled the advance, the corrections belong on the tax document for the advance payment. After that, only on the final invoice — and if the supply never happened at all, the final invoice is voided first.
  • Refunds: once you have actually sent the money back, mark Payment refunded on the credit note. Only then does the correction reach your income tax figures.
  • Voiding instead of correcting: an unpaid invoice the client never received can be voided directly. A paid one cannot — there the only route is a corrective document, or clearing the payment if no money ever arrived.
  • XML exports: when the control statement (DPHKH1) and the return are generated, corrective documents land in the right sections with negative values.

Tip: if you are handling credit notes received from suppliers, use document scanning in Taxorio. The AI recognises corrective documents as well as ordinary invoices and records them in your expenses. Photograph the document with your phone through a mobile scan session, or upload the PDF.

Summary

  1. For a VAT payer, the corrective tax document under § 42–§ 46 of the VAT Act is mandatory, not optional.
  2. Issue it within 15 days of the circumstances arising, and within 7 years of the end of the calendar year in which the tax on the original supply became due.
  3. It must reference the original invoice and state the reason for the correction.
  4. VAT is corrected in the period when the circumstances arose, not in the period of the original invoice.
  5. Corrective documents go into the control statement with negative values, in the section matching the document's size.
  6. Never delete an invoice. Issue a corrective document and keep the audit trail intact.

Corrections are one of the things the Czech tax office looks at most carefully, precisely because both sides have to report them consistently. Clean records in Taxorio and correctly generated XML exports for the control statement reduce the chance of a mismatch — and of the letter that follows one.

Taxorio scope: Taxorio provides invoicing and income/expense records for Czech sole traders. It is not full accounting or personalised tax advice. For an unsupported or unusual case, verify the treatment with a Czech accountant or tax adviser before filing.