Czech Republic: Proposed record keeping and reporting obligation for payment service providers beginning 2024

Draft amendment to the value added tax (VAT) law

Draft amendment to the value added tax (VAT) law

A draft amendment to the value added tax (VAT) law would impose new record keeping and reporting obligation on “payment service providers” beginning 1 January 2024.

The proposed obligation is based on changes to EU legislation establishing a central electronic system of payment information (CESOP) that will provide information on cross-border payments received by recipients from consumers shopping online.

The draft amendment imposes an obligation on payment service providers (mainly banks) to keep records of cross-border payments and their recipients and provide the data to tax administrators. 

Who would be subject to the obligation?

The obligation would apply to all providers of payment services that provide them in the Czech Republic (i.e., not necessarily only Czech entities). Payment service would mean a payment transaction such as a transfer of money from own funds or from a credit in the form of a card payment, direct debit, or standing order, with a bottom line of money being transferred. Records would have to be kept of payments received from another EU member state and payments to third countries, but the obligation to report cross-border payments would only be activated upon exceeding the threshold of 25 cross-border payments credited to one person during a calendar quarter.

What data would have to be recorded?

Information to be recorded would include the bank identifier code (BIC) of the payment service provider, the payment recipient’s name, tax identification number (not necessarily assigned for VAT purposes), international bank account number (IBAN), BIC and address, and, where applicable, other payment data (such as the date and time of payment, its amount and currency).

What would be the notification deadlines and formats?

Notifications would be submitted to the tax administrator by the end of the month following the end of the calendar quarter, even if no obligation to keep records arises. The submission would be electronic via a data message in a predetermined structure.

Read a September 2022 report prepared by the KPMG member firm in the Czech Republic 


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