Expenses and costs · 5 min read

A credit note received from a supplier (§74 VAT)

How to record a received credit note (a corrective document from a supplier) in Taxorio as a negative expense, correct the VAT deduction under §74, report it in the VAT control statement, and match the refunded money in your bank.

What a received credit note is

A received credit note is a corrective tax document your supplier issues to you — typically after a complaint and a return of goods, an additional discount, or an order being cancelled. It reduces the amount originally invoiced, and with it your expense and the VAT deduction you'd claimed.

Don't confuse it with a credit note you issue to your own client (the output side, §42 and §45 ZDPH — see Credit notes and corrective documents). Here you're on the receiving end, correcting your own VAT deduction under §74 of Act No. 235/2004 Coll., the VAT Act.

ℹ️ A received credit note is governed by §74 ZDPH (correcting the deduction after the supplier corrects the tax base). It isn't §74b, which covers correcting the deduction for unpaid liabilities — that's a different situation and doesn't concern a received credit note.

The duty to correct the deduction (§74)

If you claimed a VAT deduction on the original invoice and a circumstance then arises that reduces the tax base (returned goods, a discount, a cancellation), you're required to reduce the deduction. The key rule:

  • You make the correction in the return for the tax period in which you learned of the circumstances behind it (e.g. when the goods were returned and the discount agreed).
  • The duty to reduce the deduction arises even without a physical document — you don't have to wait for the paper credit note from the supplier to arrive.
  • Negative VAT reduces the deduction you'd claimed (in effect, you pay more VAT, or get less back).

How to record a received credit note in Taxorio

Route 1: the AI document inbox

The fastest way, if you have the credit note as a PDF.

  1. Upload the credit note's PDF to the document inbox (Expenses → Inbox) — by dragging it in, via Add document, by mobile scan, or by forwarding it to your collecting e-mail address.
  2. The AI recognises the document, reads the supplier, the amounts and the rates, and identifies it as a credit note. The document detail flags it with the message Credit note (corrective tax document) and suggests the original invoice's number in the Corrected document number field.
  3. Confirm with Confirm and next — this creates an expense with negative amounts, linked to the original expense.
💡 Tip: the AI also recognises a corrective document by wording like "corrective tax document", "credit note", or by negative values. Always check the result — especially the VAT rates and the period.

Route 2: manually, from the original expense

Useful when you already have the original expense recorded in Taxorio.

  1. Open the detail of the original expense, expand the three-dot menu next to the Edit button, and choose Correct document.
  2. Pick a scenario: Return of goods / partial supply, Price correction / discount (complaint) or Full cancellation (document in error).
  3. Taxorio pre-fills the supplier and rates from the original expense. You only enter the returned amount (a full cancellation pre-fills the entire amount); Taxorio converts a positive value into a negative one the moment you enter it.
  4. Click Issue credit note — this creates a received credit note linked to the original expense, with negative amounts.

A credit note always links back to the original expense

Taxorio won't create a standalone, "unlinked" credit note — not by hand, and not from the inbox either. The corrective document form asks for the original document's number and the app verifies it against your records; if it can't find it, saving is refused with a message that the original document needs to be recorded first. That's by design: without a parent document there's no way to make sure the sum of credit notes never exceeds the original amount.

So if you don't have the original expense in Taxorio (it was only entered as a lump sum, or not at all), record it first and only then link the credit note to it.

Impact on VAT and the control statement

A received credit note enters the VAT return with negative values and reduces the input deduction you claim. In the VAT control statement (KH):

  • In the DP3 return it lands on line 40 — a reduction of the tax base and input tax (for the standard rate; line 41 for the reduced rate).
  • In the control statement it belongs in section B.2 (a document of CZK 10,000 or more including tax) or B.3 (up to CZK 10,000 including tax).
  • Whether it falls into B.2 or B.3 is judged by the credit note's absolute value (the minus sign isn't taken into account for the CZK 10,000 threshold).
⚠️ Watch out: record the correction to the deduction in the period you learned about the return / discount — not retroactively in the period of the original invoice. Taxorio files the credit note by its own date; check that it falls into the right tax period.

Impact on income tax

A negative expense reduces the expenses claimed for that period. That raises the tax base and your profit — the returned amount is no longer a tax-deductible expense. Taxorio factors a credit note into the expense overview automatically, with a negative sign.

Matching the refunded money in the bank

If you have automatic payment matching turned on (a PRO plan feature), the refunded payment lands in the Bank section. You match it to the credit note by hand there:

  1. In the Bank section find the incoming refund from the supplier.
  2. Click Match document and, in the Assign and match document window, select the relevant received credit note.
ℹ️ The payment itself has no tax impact — that's carried by the credit note (the correction to both the deduction and your expenses). Matching the refund is there for a clean record, and so you can see that the credit note has actually been settled.