Czech Republic: One-time transaction is not economic activity for VAT registration purposes (Supreme Administrative Court decision)
VAT registration required if taxpayer engaged in ongoing supply of goods or services.
The Supreme Administrative Court (SAC) held that a taxpayer that provided a customer with commercially exploitable contacts on a one-time basis (with the consideration being paid in installments over several years) was not engaged in economic activity for value added tax (VAT) registration purposes.
The court concluded that a one-time provision of goods or services cannot, in and of itself, be considered economic activity carried out systematically for the purpose of generating regular income, which would require the provider to register for VAT.
The court emphasized that the tax authority must examine the actual nature of the taxpayer’s activity, not merely the regularity of the income. The key is to determine whether the taxpayer engaged in a one-time transaction, the price of which was paid in installments, versus an ongoing supply of goods or services.
Read a March 2026 report prepared by the KPMG member firm in the Czech Republic