Dobrovolná registrace k DPH. Jak jí úspěšně projít?

Voluntary VAT Registration. How to Succeed?

Why even register voluntarily?

The most common reasons why people want to register voluntarily, or why it pays off for them, are as follows:

• most customers are VAT payers (B2B) and it is possible to claim input tax deduction,
• materials from suppliers are subject to the standard rate while output is taxed at the reduced rate (e.g. construction),
• expenses exceed income (typically at the start of a business, setting up premises),
• foreign trade: the position of an identified person without the right to deduction would lead to a loss (VAT is assessed but there is no right to deduct),
• approaching turnover threshold.

Disadvantages of registration

• increased administration,
• stricter rules for issuing documents,
• higher risk of fines for non-compliance (e.g. related to VAT control statement requests),
• VAT payable on output,
• mandatory document archiving for 10 years.

How to proceed with voluntary registration

The application can be submitted at any time. The basic step is simple: filling in the application form, e.g. on the mojedane.cz portal.

The application follows the procedure under § 6f(1) of the VAT Act (voluntary registration). I do not automatically become a taxpayer after submitting the application; registration must be approved by the tax administrator (tax office). The tax office may also reject the application.

Information to be included in the application

• identification and contact details (self-employed or company),
• registered office and actual place of business,
• bank account numbers (published and for VAT refunds),
• expected or achieved annual turnover,
• reason for registration.

How long does voluntary VAT registration take?

The tax administrator has 30 days to respond. If my application is approved, I become a VAT payer the day after receiving the notification of the decision that I have been registered.

Our real-life experience with voluntary registrations is that registration can, in the fastest cases, be completed within a week. The average processing time is 3 weeks. In some cases, with a request for clarification (with a 15-day deadline), it stretched to 6 weeks. And in rare cases (when the client was unable to provide anything to prove economic activity or stopped cooperating), the registration was even rejected.

The most common stumbling block in voluntary registration: economic activity

§ 6f(1) of the VAT Act begins as follows:

A taxable person with a registered office or establishment in the country who carries out or will carry out transactions for which they would be entitled to deduct tax …

The built-in condition assumes that the applicant is carrying out economic activity or is preparing for it (engaged in preparatory economic activity).

A frequent phenomenon when sending a voluntary VAT registration application is that instead of a decision on registration, the tax administrator replies with a “Request to eliminate doubts in registration data” and a list of various questions and requirements to supplement information to dispel doubts about whether the taxable person is carrying out or preparing to carry out economic activity.

How to facilitate and speed up voluntary registration

If the company has a history, it significantly helps to provide a brief explanation of activities, a list of issued invoices with examples of several of them, and an account statement proving payments.

What the tax administration typically wants to know

• actual registered office and way of conducting business,
• technical, material, and financial resources,
• who carries out the activity,
• who will keep the accounts and where records will be stored,
• presentation of activities (website, social media, advertising),
• information about suppliers and customers.

With newly established companies, such requests arrive with iron regularity. It is therefore recommended to attach available information, received invoices, contracts, and a business plan to the application. An account statement or account agreement is often attached as well to verify the account number.

At the same time, to register the account (to verify that it belongs to the company), the tax administration often requires either an account statement or a bank agreement showing the account number.

Statistically, in about half of the cases, such requests can be avoided, thereby shortening the registration time. It depends on the quality of the documents and the assessment of the specific officer.

Conclusion

Voluntary registration can be straightforward or lengthy. The key is to prove economic activity.

If my approach is “Give me VAT registration, then I’ll start doing business, otherwise it makes no sense for me,” then the process will be more complicated. Usually, there are not many documents available to prove economic activity.

If, on the other hand, I take the first risky steps into the unknown even without VAT registration and have clear evidence that I am already doing business or seriously preparing for it, registration is usually not a problem.

The voluntary registration process can be successfully completed, and we are ready to support you in it.