E-Invoicing in Czech Republic

by | Apr 8, 2024 | E-invoicing

The Czech Republic intended to introduce the electronic registration of sales revenues (ERS) in 2019. Businesses subject to Czech income tax from certain sectors (hotel, restaurant services, wholesale and retail sector), would have had real-time reporting obligations in relation to their domestic supplies if the payment was made in cash, vouchers, gift cards. Bank transfers, credit, and debit card payments were out of scope.

In 2022, the Czech government abolished the requirement effective January 2023, due to the decreasing amount of cash transactions. Thus, there is currently no mandatory digital reporting obligation in effect in Czech Republic. Taxpayers will be able to report their sales data on a voluntary basis until December 31, 2023.
Though there is no mandatory obligation in place, electronic invoices issued for B2G transactions should be accepted where they are in a format compatible with the European standard for e-invoicing. Contracting authorities should not be able to reject an e-invoice when in this format.

Legislation and Compliance

•    October 2016: Public contracting authorities in the Czech Republic are no longer allowed to reject an e-invoice issued by an economic operator if it is issued in a format compatible with the European standard.
•    April 2019: Directive 2014/55/EU was transposed into national legislation. As a result, all public entities must be able to receive and process electronic invoices in accordance with the European Standard on e-invoicing (EN-16931).

E-Invoicing Formats

The following formats are commonly used for e-invoicing in the Czech Republic:
•    ISDOC
•    EDIFACT
•    UBL 2.1

The National E-Invoicing Network

The Czech Republic operates the Národní elektronický nástroj (NEN) as its national e-invoicing network.

Tax Authority and eSignature

•    Tax Authority: The Ministry of Finance oversees e-invoicing compliance.
•    eSignature: Not required for e-invoices.

Real-Time Reporting / Fiscalization

Mandatory real-time reporting and fiscalization in the Czech Republic went into effect on December 1, 2016, as per the Electronic Registration of Sales (EET). This law applies to B2B, B2C, and B2G businesses including the hospitality, retail, and wholesale sectors. All reports must be transmitted to the Czech Financial Administration in real-time. Violation of this regulation can lead to hefty fines.

Nathan Trouwloon
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