The Czech režim přenesení daňové povinnosti — the domestic reverse charge — shifts the obligation to declare and pay VAT from the supplier to the customer. For a lot of sole traders and small firms it is a reliable source of uncertainty: when does it apply, what has to be on the invoice, and how is the supply reported in the VAT return and the control statement? This article walks through all three.
What the reverse charge does
Normally the supplier puts VAT on the invoice, collects it from the customer and pays it to the tax office. Under the reverse charge:
- The supplier issues the invoice without VAT, stating only the taxable amount
- The customer calculates the VAT themselves, declares it in their own VAT return, and — if entitled — claims the same amount as input VAT in the same return
The point of the mechanism is to close off tax fraud, in particular the carousel schemes in which chains of companies exploited the VAT system to claim deductions they were not entitled to.
Legal basis
The regime is set out in § 92a to § 92i of Act No. 235/2004 Coll., on value added tax. The Act distinguishes two categories:
- Permanent reverse charge (§ 92b–§ 92e) — applies indefinitely to defined goods and services
- Temporary reverse charge (§ 92f) — the government may extend it by decree to further categories
When the reverse charge applies
Domestically the regime is mandatory for the following supplies, provided both parties are VAT payers.
Construction and assembly work (§ 92e)
This is by far the most common case in practice. It covers:
- Construction work falling under CZ-CPA codes 41 to 43
- New builds, reconstructions, repairs and maintenance of buildings and structures
- Installation work — electrical, plumbing, heating, air conditioning
- Demolition and site preparation
- Finishing work — painting, tiling, flooring
Important: the reverse charge on construction work applies only where both the supplier and the customer are VAT payers. Invoice construction work to someone who is not registered — a private individual, say — and you issue an ordinary invoice with VAT.
Supplies of gold (§ 92b)
The reverse charge applies to gold supplied as raw material or semi-finished product of a fineness of 333 thousandths or higher, and to investment gold where the supplier has opted to tax the supply.
Goods listed in annex 5 (§ 92c)
This annex covers specific commodities — metal waste and scrap, waste paper and other materials destined for recycling.
Emission allowances (temporary regime, Government Decree No. 361/2014 Coll., code 11)
Transfers of greenhouse gas emission allowances are also covered.
Supplies of immovable property (§ 92d)
The reverse charge applies to a supply of immovable property where the payer elects to treat it as a taxable supply, after the exemption period has run out.
Further goods under government decree
Under § 92f and the relevant government decrees, the reverse charge extends to:
- Mobile phones, where the taxable amount on a single document exceeds CZK 100,000
- Integrated circuits, on the same CZK 100,000 condition
- Supplies of gas and electricity to a trader
- Intermediary services relating to emission allowances
How to issue a reverse charge invoice
A reverse charge invoice differs from an ordinary one in a few decisive respects.
What the invoice must contain
Everything required by § 29 of the VAT Act, plus the reverse charge specifics:
- Supplier identification — name, registered address, DIČ (tax ID)
- Customer identification — name, registered address and the customer's DIČ, which is mandatory here
- Invoice number
- Date of issue and the DUZP (date of the taxable supply)
- Taxable amount in CZK
- The VAT rate — a reverse-charge document need not show the rate or the tax amount at all (§ 29(3)(c) of the VAT Act); Taxorio forces 0 % on the lines and states no tax amount
- The statement "Daň odvede zákazník" — "the customer will account for the tax". The Czech wording is what the Act requires.
The rule to remember: never put a VAT figure on a reverse charge invoice. You state the taxable amount and the rate, and the invoice total equals the taxable amount. The statement "Daň odvede zákazník" is mandatory, and leaving it off can put the use of the regime in question.
Example: an invoice for construction work
Say you are a self-employed electrician registered for VAT. You have wired an office for a company that is also a VAT payer. The invoice looks like this:
- Supplier: an electrician trading as a sole trader, IČO 12345678, DIČ CZ12345678
- Customer: the client company, IČO 87654321, DIČ CZ87654321
- Invoice number: 20260042
- DUZP: 10 April 2026
- Description: complete electrical installation, office premises, Pražská 15
- Taxable amount: CZK 185,000
- VAT rate: 21 %
- Daň odvede zákazník
- Total due: CZK 185,000
Note the total: CZK 185,000, not CZK 223,850. The customer works out the VAT and declares it in their own return.
Reporting in the VAT return and the control statement
This is where most of the errors happen, so it is worth going through both sides.
As the supplier, issuing the invoice
VAT return:
- The taxable amount goes on line 25
- No VAT figure is entered there — from your side it is nil
Control statement:
- The supply is reported in section A.1
- You enter the customer's DIČ, the invoice number, the DUZP, the taxable amount and the code of the supply
As the customer, receiving the invoice
VAT return:
- The taxable amount and the VAT you have calculated go on lines 10 and 11 — taxable supplies received under the reverse charge
- You claim the input VAT on lines 43 and 44, if you have a full right to deduct
Control statement:
- The supply is reported in section B.1
- You enter the supplier's DIČ, the invoice number, the DUZP, the taxable amount, the VAT you calculated and the code of the supply
Codes of the supply
The control statement requires a code identifying what was supplied. The ones you are most likely to meet:
- 4 — construction and assembly work
- 1 — gold
- 3 — supply of immovable property
- 5 — goods listed in annex 5 to the VAT Act
- 12 — cereals and industrial crops
- 13 — metals
- 14 — mobile phones
- 15 — integrated circuits
- 16 — portable data-processing devices
- 17 — video game consoles
Codes 12 to 17 belong to the temporary regime under Government Decree No. 361/2014 Coll. and apply only if the taxable amount of all such goods on a single document exceeds CZK 100,000. Below that limit the reverse charge is not used.
In Taxorio: you issue a domestic reverse charge invoice by switching on the § 92a option. Taxorio then locks every line to the 0 % rate, asks for the code of the supply on each line, and checks the customer's DIČ against the register of VAT payers — an identified person (identifikovaná osoba) is refused, because the regime is not open to them. The document is placed on line 25 of the VAT return and in section A.1 of the control statement automatically; there is nothing to add by hand in EPO.
The mistakes people actually make
1. Charging VAT when the reverse charge applied
If you invoice construction work with VAT stated when the reverse charge should have been used, the tax office may refuse the customer's deduction — and you still owe the tax you wrongly stated. The fix is under § 43 of the VAT Act — correct the document and file a supplementary return for the original tax period; a credit note under § 42 is not the tool, as it changes the taxable amount, not a wrong rate.
2. Leaving out "Daň odvede zákazník"
The statement is a mandatory particular under § 29(2)(c) of the VAT Act. Omitting it invites a dispute with the tax office. Put it on the invoice, clearly.
3. Reporting in the wrong section
The supplier reports in A.1, the customer in B.1. Swap them and the two sides no longer match in the Financial Administration's system, which is how you end up with a request for explanation.
4. Using the reverse charge with a non-payer
The regime applies only between two VAT payers. If the customer is not registered, you invoice normally with VAT. Check before you issue: the register of VAT payers on the Financial Administration's website will tell you, and Taxorio's ARES lookup fills in the client's details when you add them.
5. The wrong code of the supply
A wrong code creates a mismatch between your control statement and your trading partner's, which again triggers a check.
Cross-border services
The reverse charge is not only a domestic mechanism. Within the EU it is the standard way cross-border services are handled:
- Services supplied to the EU — as a Czech VAT payer supplying a taxable person in another member state, you invoice without VAT and the customer accounts for it in their own country (§ 9(1) of the VAT Act)
- Services received from the EU — if you receive a service from a taxable person in another member state, you must declare the VAT in Czechia (§ 24 of the VAT Act), and you can claim the same amount as input VAT
Cross-border supplies go on different lines of the return from domestic ones: services received from the EU on lines 5 and 6 (standard and reduced rate respectively), with the deduction on lines 43 and 44.
A decision tree
Before you issue the invoice, ask:
- Is the customer a VAT payer? If not — invoice normally, with VAT.
- Does the supply fall into a reverse charge category? Construction work, gold, scrap, emission allowances, immovable property, mobile phones or integrated circuits above CZK 100,000. If not — invoice normally, with VAT.
- If yes to both — issue the invoice under the reverse charge: taxable amount and rate only, the statement "Daň odvede zákazník", and report the supply in section A.1 of the control statement and on line 25 of the VAT return.
In Taxorio that comes down to the § 92a switch on the invoice: rates are locked to 0 %, each line asks for its code of the supply, the customer's DIČ is verified against the register of VAT payers, and the reporting on line 25 and in section A.1 follows from the document itself.
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.