Improve VAT reporting and adjustments - Czechia

Enabled for	Public preview	General availability
Users, automatically	-	Oct 1, 2024

Business value

Add non-deductible VAT functionality for Czech legislation to support VAT reporting and accounting period-end posting coefficient.

Feature details

The standard functionality for non-deductible VAT lets you reduce input VAT entries and add the amount of unclaimed VAT to the account or item entry. However, it doesn't cover all mandatory requirements of Czech legislation, especially regarding VAT reporting and the posting coefficient at the end of the accounting period.

Set the value of the VAT reduction coefficient for the whole company in one place. The system applies the value to all marked combinations of VAT posting groups. Besides reducing input tax through the shortening coefficient, you can set a 100% tax reduction in the VAT account group combination. Set this value when there's no entitlement to apply VAT on the input side, but the output side of transactions under the reverse charge regime must report VAT in full.

The VAT reduction also applies to the VAT Report and the VAT Control Reports, which include the entire unreduced amounts. After the end of the calendar year, you can recalculate all VAT entries from the period based on the calculated settlement coefficient. You can post the difference between the originally applied coefficient and the settlement coefficient.

This functionality extends the non-deductible VAT solution for the Czech Republic to support advance purchase invoices.

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Additional resources

Non-deductible VAT for Czech (docs)