Disclaimer: This article is informational and does not replace tax advice. Amounts and rules can change — check the current position at financnisprava.gov.cz or with a tax adviser.
Is your turnover creeping towards the DPH (Czech VAT) threshold? Rules that took effect in 2025 and continue into 2026 catch a lot of sole traders off guard. There is no longer a single limit tracked over 12 rolling months, but two limits counted per calendar year. This article explains when you actually become a VAT payer, how the two thresholds differ, and which deadline to watch.
Two turnover limits: CZK 2,000,000 and CZK 2,536,500
The rules work with two turnover figures that have completely different consequences:
| Limit | What happens when you cross it |
|---|---|
| CZK 2,000,000 in a calendar year | On the registration form you choose whether you become a payer from 1 January of the following year (the default) or from the day after you crossed the limit, if you state so on the form. |
| CZK 2,536,500 in the same calendar year | You become a payer by operation of law from the day after you cross it. |
In other words, the first limit gives you a choice and time to prepare; the second gives you neither. Anyone who shoots past the higher figure within one calendar year becomes a VAT payer almost immediately.
One important point about the amount: CZK 2,536,500 is a fixed crown figure written into the law as the equivalent of EUR 100,000; it is not recalculated with the exchange rate. Do not confuse it with the EU-wide EUR 100,000 threshold of the small-business scheme, which is a different mechanism entirely (more on that below).
Why turnover is counted per calendar year
The fundamental change is that turnover is tracked per calendar year rather than over twelve consecutive rolling months as it used to be. This has applied since 1 January 2025 and continues in 2026.
In practice your turnover resets to zero every 1 January and starts again. To watch the threshold you always add up supplies made since 1 January of that year. It simplifies the record-keeping, but it also means you need a running total — particularly in the second half of the year, when the figure accumulates.
A worked example: suppose that from January to October 2026 you reach a turnover of CZK 1,950,000, and in November you issue an invoice for CZK 120,000. The total of CZK 2,070,000 crosses the first limit of CZK 2,000,000. That triggers the choice: on the registration form you decide whether to become a payer from 1 January 2027 (the default) or from the day after you crossed the limit. If you also went past CZK 2,536,500 before the end of 2026, you would become a payer by law from the day after crossing it, regardless of what you chose.
This is one place Taxorio helps: it keeps a running total of your annual turnover from the documents you have issued and warns you as you approach the limit, so crossing it does not take you by surprise and you still have time to file. You can also run the numbers in the VAT turnover tracker.
What counts towards turnover
Turnover for VAT purposes is broadly the consideration for taxable supplies made with a place of supply in Czechia — your sales of goods and services. The sale of fixed assets, for example, is excluded. If you run several activities, they are added together under one DIČ (tax ID), as one person, not counted separately.
The practical consequence: turnover is not the same thing as profit, nor as income minus expenses. It is the sum of what you invoiced. So you can approach the threshold faster than your profit would suggest — watch your sales, not what is left at the end.
You can also register voluntarily before you reach the limit. That tends to make sense when your customers are VAT payers themselves (they deduct the tax, so your VAT-inclusive price does not burden them) and you also buy a lot of inputs with VAT (you can reclaim the input tax). If you invoice mostly non-payers and end consumers, voluntary registration usually just raises your price and your admin.
When exactly you become a payer
The most common confusion is about the date you are actually a payer from. It depends on which limit you crossed:
- Crossing CZK 2,000,000 (the lower limit): the default is that you become a payer from 1 January of the following calendar year. On the form you can also opt to become a payer from the day after you crossed the limit.
- Crossing CZK 2,536,500 (the higher limit) in the same year: you become a payer by law from the day after the date you crossed it. There is no choice here; it is automatic.
The difference matters enormously for your invoicing. Until the day you become a payer, you invoice without VAT. From that day on, your documents must show tax at the correct rate. Miss the changeover and you risk invoicing incorrectly — and then chasing the tax and paying it out of your own pocket.
Which is why it pays to keep the turnover under control as you go, whether with your own spreadsheet or a tool that totals the year automatically and warns you in time. To see how it all fits together with income tax and contributions, use the income tax calculator.
The deadline for filing the registration form is 10 working days from the date you crossed the limit. It needs watching: missing it can lead to penalties and to arguments about the date from which you were a payer. The registration procedure step by step, including everything you will need, is in VAT registration step by step. It is worth reading before you get near the threshold — preparing ahead of the form saves a lot of stress.
VAT rates in 2026
Once you are a payer, you apply the rates in force to your supplies. For 2026:
| Rate | What it applies to |
|---|---|
| 21% | standard rate — most goods and services |
| 12% | reduced rate — food, medicines and selected services, among others |
| 0% | books only, including e-books and audiobooks |
Careful with the zero rate: it really does apply only to books, whether printed, electronic or audio. Medicines and food are not zero-rated — they sit in the reduced 12% band. To work out the tax on a specific amount, use the VAT calculator; the fuller picture is in VAT rates 2026.
Cross-border supplies: the SME scheme and the identified person
Alongside the domestic limits there is the scheme for small enterprises, the cross-border SME scheme. It lets you use the VAT exemption in another EU member state provided your EU-wide turnover stays under EUR 100,000.
Do not confuse this euro limit with the domestic exemption, which follows the CZK 2 million figure. They are two different mechanisms: the domestic limit decides whether you are a VAT payer in Czechia, while the SME scheme deals with exemption when trading across the EU. For most purely domestic sole traders, only the crown limit is relevant.
If you buy a service from abroad — advertising on social networks, cloud tools — or supply a service to another EU country, you do not have to become a full VAT payer straight away. For those cases there is the identified person, which is far simpler and does not stop you invoicing domestic customers without VAT. We go through the differences between full registration and the identified person in Identified person for VAT. For a handful of small cross-border supplies the identified person is usually the right and cheaper choice.
What being a VAT payer involves
Registration is not the end of it but the start of new duties. As a payer you will:
- file a VAT return — usually monthly, since the shorter tax period tends to be the default for new payers;
- file a control report (kontrolní hlášení) — for individuals, aligned with the VAT tax period;
- show VAT on your invoices at the correct rate and keep records for tax purposes;
- have the right to deduct input tax on supplies received and used for your economic activity.
Everything is filed electronically through the Financial Administration's EPO portal. To keep the admin light, Taxorio generates the XML files for EPO from your documents — both the VAT return and the control report — so you only upload and submit them. XML export is a feature of the PRO plan.
A short example of how the deduction works: if in a given month you issue invoices with CZK 42,000 of output VAT and buy inputs (materials, software, services) carrying CZK 12,000 of input VAT, you pay the difference of CZK 30,000 to the state. That ability to deduct input tax is the main advantage of registration for anyone buying a lot from other payers. The downsides are the administration and the deadlines: returns and control reports have fixed dates and missing them is penalised. The control report in particular gives you very little time to respond to a query from the tax office, so it pays to keep your documents in order continuously rather than at the end of the period.
If you are only starting out and wondering whether to prepare for registration in advance, our introductory guide on starting out as an OSVČ helps you assemble the whole picture of your obligations long before you get near the turnover limit.
Making registration and VAT easier on yourself
Becoming a VAT payer is an administratively demanding moment — tracking the turnover, registering, then filing returns and control reports regularly. Taxorio helps in a couple of places: it totals your annual turnover as you go and warns you before you cross the limit, and after registration it generates the XML files for EPO (the VAT return and the control report) on the PRO plan, so you only upload them to the Financial Administration portal.
Before you register, an overall view of a sole trader's taxes in the income tax calculator is worth having too — so you know how VAT fits into your wider tax position.
In short
In 2026 you become a VAT payer under two limits counted per calendar year: cross CZK 2,000,000 and you choose whether to be a payer from 1 January of the following year or sooner; cross CZK 2,536,500 and you become one by law from the following day. The registration form is due within 10 working days. Turnover is tracked per calendar year, so keep a running total. For small cross-border supplies, consider the identified person rather than full registration.
The most common mistake is noticing the crossing far too late — typically while doing the year-end books, by which time the deadline for the form has passed. Tracking the turnover of your issued invoices as you go is the cheapest insurance you can buy. And the exact VAT on any given amount is always a moment away in the VAT calculator.
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.