Your client sent a deposit, you've finished the work, and now you need to invoice for the rest — without charging for the deposit twice. The solution is a final invoice: a closing document that deducts the deposit already received from the total price, so the client only pays the difference.
The full chain has four steps: an advance invoice (proforma), the payment, — for a VAT payer — a tax document for the payment received, and finally delivery followed by a final invoice. Below you'll find two complete worked examples, for a non-VAT payer and for a VAT payer, plus what to do when the deposit turns out to be higher than the final price, or the client only pays part of it. For the basics of advance invoices, see our guide to proforma invoices in Czechia.
The full chain from deposit to final invoice
- Advance invoice (proforma) — a request for payment before delivery; not a tax document.
- Payment — the client transfers the deposit.
- Tax document for the payment received, VAT payers only — issued within 15 days of receiving the payment; its date of taxable supply (DUZP) matches the day the money arrived, and VAT is declared on the amount received.
- Delivery — the work is finished or the goods delivered.
- Final invoice — the closing document that deducts the deposit; its DUZP matches the day of delivery, and the client only pays the difference.
For a non-VAT payer, step three doesn't apply, since no tax document for the payment arises. Each step exists for a reason, and skipping one risks a mistake. The advance invoice only tells the client how much to pay and where — it doesn't create any tax obligation by itself. The payment is the moment that triggers a VAT payer's duty to declare tax, even though the job isn't finished yet. The tax document for the payment received formally captures that obligation and becomes the supporting document for the return and control statement for that period. Delivery is the factual event that sets the DUZP of the final invoice. And the final invoice itself closes the chain so the client pays exactly once for every crown owed.
Example 1: non-VAT payer
A client orders a job for 50,000 CZK and pays a deposit of 20,000 CZK upfront. Once the job is delivered, you issue the final invoice:
| Line | Amount |
|---|---|
| Total price of the job | 50,000 CZK |
| Deduction of deposit received | −20,000 CZK |
| Balance due | 30,000 CZK |
In a non-payer's income records, 20,000 CZK is recorded on the day the deposit is received and 30,000 CZK on the day the balance is received — 50,000 CZK in total, but split across two payments, and potentially two tax years if the payments fall in different calendar years.
Example 2: VAT payer at the 21% rate
A job worth 50,000 CZK excluding VAT (60,500 CZK including VAT) with a deposit of 20,000 CZK excluding VAT, i.e. 24,200 CZK including VAT (a base of 20,000 CZK plus 21% VAT of 4,200 CZK). Once the deposit is received, within 15 days you issue a tax document for the payment received, showing a base of 20,000 CZK and VAT of 4,200 CZK, with its DUZP matching the day the payment arrived.
Once the job is delivered, you issue the final invoice:
| Line | Tax base | VAT 21% | Total |
|---|---|---|---|
| Total price of the job | 50,000 CZK | 10,500 CZK | 60,500 CZK |
| Deduction of deposit received | −20,000 CZK | −4,200 CZK | −24,200 CZK |
| Balance due | 30,000 CZK | 6,300 CZK | 36,300 CZK |
You only pay VAT on the difference — 6,300 CZK on the balance — because you already declared 4,200 CZK earlier on the document for the payment received. Across both declared supplies you pay the same 10,500 CZK in total, just split across two periods according to when the payments actually arrived.
The same principle applies at the reduced 12% rate — only the percentage used in each line changes. What matters is that you only ever add VAT on the difference between the total price and the deposit already declared, never on the full amount again.
Which date belongs where
On the final invoice, the date that matters is the DUZP matching the day of delivery. On the document for the payment received, the date that matters is the DUZP matching the day the payment arrived. These two dates almost always differ, and they decide which month or quarter each amount belongs to in your VAT return and control statement. Our article on when a Czech sole trader taxes an invoice covers how to determine the date of taxable supply correctly.
A worked example: the deposit arrives on 10 September, and the job is delivered on 5 October. For a VAT payer, the base and tax on the 20,000 CZK deposit — 4,200 CZK — belong to the September return and control statement, while the 30,000 CZK balance and its 6,300 CZK VAT belong to October's. If you mistakenly lumped both amounts into a single month, the return would be substantively wrong, even if the total tax for the year came out the same.
When a job is split into several stages with multiple deposits
Larger jobs sometimes involve several partial deposits — say 30% upfront, 30% halfway through, and the balance on completion. The principle stays the same: each payment received by a VAT payer generates its own tax document for the payment received, with its own DUZP, and the final invoice deducts all the deposits received so far at once, not just the most recent one. A non-VAT payer records each payment as separate income on the day it's received and deducts the sum of all deposits from the total price on the final invoice.
When the deposit is bigger than the final price
If the job ends up smaller than planned and the deposit exceeds the final price, the client is owed a refund. For a non-payer, it's enough to send the money back and note it against the document. For a VAT payer, you also need to correct the previously issued tax document for the payment received, using a corrective tax document under Section 42 of the VAT Act, since you're reducing a tax base you already declared tax on. Our guide to cancelling an invoice and issuing a credit note explains this correction in detail.
When the client only pays part of the deposit
A partially paid deposit needs to be handled case by case — Taxorio doesn't currently support automatically splitting a partial deposit payment. In practice, you either agree with the client to pay the rest of the deposit before you start work, or you record the partial payment manually. For a VAT payer, it's worth discussing the impact of a partial payment on the tax document with your accountant, since it depends on the exact amount received and the payment date.
The simplest prevention is to set clear terms with new clients upfront: the deposit is paid in full, or the work doesn't start. For long-standing, trusted clients a more flexible approach can be fine, but it's still worth having any agreement on a partial payment in writing, for example in a confirmation email.
Common mistakes
- Taxing the deposit twice. VAT on the deposit already received isn't declared again on the final invoice — only the base and tax already declared are deducted.
- A final invoice with no deposit deduction. The client would effectively pay the full price a second time, which leads to disputes and lost trust.
- A VAT payer's deposit with no tax document. Without it, there's no support for the return covering the period the payment was received, and you can't show a tax authority when the obligation to declare arose.
- The wrong month in the return. The deposit belongs to the month it was received, the balance to the month of delivery — not both lumped into whichever period is more convenient.
- A final invoice with no reference to the advance invoice. Without the original invoice number, it's harder for the client — and for anyone reviewing your records later — to trace what the deduction relates to.
How Taxorio handles this
In Taxorio, you issue the final invoice directly from a paid advance invoice's detail page, using the Issue final invoice button. The system calculates the deposit deduction and the VAT due on the difference automatically, using the previously generated tax document for the payment received for a VAT payer. The whole chain — advance invoice, payment, tax document for the payment, and final invoice — stays linked and traceable in one place, including the DUZP on each document.
That means nothing gets lost in your VAT return or control statement about which period a given amount belongs to, even if several months pass between the deposit and delivery.
You can create an account and try it for free at app.taxorio.cz/register.