E-invoicing in Czechia is primarily referring to the Electronic Sales Registration system known as "Elektronická evidence tržeb" (EET). The EET is a part of the government's effort to combat tax evasion and improve tax collection by requiring businesses to report sales in real-time or near-real time to the tax authorities.
The assumptions of the EET system (E-invoicing in Czechia) are as follows:
Real-Time Sales Reporting: Under EET, businesses are required to report sales data to the financial authority's server immediately at the point of sale. This data includes information on the transaction amount, the business conducting the sale, and the tax collected.
Scope: Initially, the requirement to use EET was rolled out in phases, starting with businesses in the hospitality industry, followed by retail and wholesale sectors. There are plans to gradually extend it to other sectors as well.
Electronic Records: Each sale is recorded electronically, and a unique confirmation code is received from the tax authority's server, which must be provided to the customer along with the receipt.
Fiscalization: The system is designed to 'fiscalize' sales data, ensuring that it's captured and reported in a way that makes it verifiable and secure for tax purposes.
Implementation and Compliance: Businesses need to use certified cash registers or point-of-sale systems that are compatible with the EET system to comply with these reporting requirements.
The implementation of the E-Invoicing in Czechia (EET) has occurred in stages over the past few years. The first two phases, affecting restaurants and accommodation services, as well as retail and wholesale businesses, have already been implemented.
The subsequent phases were planned to be rolled out to cover other sectors and types of businesses. However, the exact timeline for the complete implementation of EET has been subject to changes and delays, often influenced by legislative developments and economic circumstances, such as the impact of the COVID-19 pandemic.
At the end of 2022, there had been significant discussions and legislative changes regarding the Electronic Sales Registration system (EET) in the Czech Republic. The government had proposed to cancel the mandatory use of EET for certain business sectors. Indeed, some information suggests that as of January 1, 2023, the obligation to use the EET was suspended or canceled for some or all businesses.
This change would have been part of a broader movement within the Czech Republic's government to alleviate the administrative burden on businesses, especially in light of economic pressures and the feedback received from the business community regarding the EET system.
Businesses that had already implemented EET could continue to use the system on a voluntary basis. For those businesses that had not yet implemented EET, or for those looking to adapt to the legislative changes, it would mean reevaluating their sales recording and reporting practices.
It is crucial for businesses operating in the Czech Republic to stay informed through official channels, such as the Czech Ministry of Finance or the Financial Administration of the Czech Republic, for up-to-date and definitive information on the status of EET obligations. Of course, businesses can voluntarily opt into the Electronic Sales Registration system (EET), even if they are not yet required to do so by law. Voluntary registration allows businesses to get ahead in compliance and adapt their processes to the EET system at their own pace before it becomes mandatory for their sector.
What you need to do to perform EER voluntary:
Notification: Businesses typically need to notify the Czech tax authorities of their intention to voluntarily register for EET.
Obtaining Certification: They must ensure their cash registers or sales systems are compatible with the EET system. This might require purchasing new equipment or updating existing software.
Integration: The sales system must be integrated with the tax authority's system to report sales data in real-time.
Reporting: Once registered and set up, the business would start reporting its sales data according to the EET requirements, receiving confirmation codes for each transaction to be provided to the customers along with their receipts.
The advantages of voluntary participation could include being prepared for when the system becomes mandatory and potentially uncovering any issues in the business’s sales recording processes that might need correction.
If you are operating a business in Czechia, or planning to do so, it's highly recommended to consult with a local tax advisor or legal expert who can provide guidance tailored to your specific circumstances and inform you of the current legal requirements regarding EET and sales reporting.
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