Customs System in the CR
31. 7. 2011
The following document contains basic information on the customs system in the Czech Republic.
Transfer of goods across Czech national borders
On the first day of the Czech Republic’s membership in the EU, the country’s customs authorities abolished routine customs checks of goods transferred across the internal borders, i.e. the common border between the Czech Republic and other EU member states.
Since the Czech Republic does not have any external EU borders (borders with non-EU member states), the routine customs checks of goods transferred across the Czech border for customs and taxation purposes are usually conducted either at international airports. Note that these checks do not apply to flights between airports within the EU territory. Since the Czech Republic became a part of the Schengen area, routine checks of persons moving across the national border, i.e. checks of passports and visas by the Czech police at borders has been abolished (except for flights from/to non-Schengen member states).
Any trade between EU member countries (including new member countries such as Romania and Bulgaria, which joined the EU in 2007) is considered intra-Community trade, which is not subject to routine customs checks or duties or other fees collected in relation to the importation or exportation of goods. Goods are transferred freely across internal EU borders.
Customs procedures apply to goods moved from/to non-EU member states. The customs procedures are stipulated mainly by EU customs regulations. The most important are:
- Council Regulation (EEC) No. 2913/92 of 12 October 1992, by which the customs code of the Community is issued, as amended.
- Commission Regulation (EEC) No. 2454/92 of 2 July 1993, by which Council Regulation (EEC) No. 2913/92 is implemented, as amended.
- Council Regulation (EEC) No. 918/83 of 28 March 1983, on the Community system for customs duty exemption, as amended.
- Council Regulation (EEC) No. 2658/87 of 23 July 1987, on customs and statistical nomenclature and on the Common Customs Tariff, as amended.
These regulations are available in the languages of the current member states, for example on the EU web site.
Statistics on intra-Community trade (Intrastat)
EU legal regulations only stipulate certain obligations for enterprises in relation to intra-Community movement of goods. For the purposes of the EU’s common trade policy, trade operations between member states must be statistically monitored. Entities whose subject of business is intra–Community trade and whose turnover has reached a set limit have the stipulated obligation to fill out reports for intra–Community trade statistics, i.e. Intrastat.
Value added tax
As mentioned above, customs duties and any other additional fees collected upon import or export of goods do not apply in the case of intra-Community trade when the goods move in the free-circulation regime. This, of course, does not apply to value added tax (VAT). VAT legislation is laid out by the national regulations of individual countries implementing the common EC VAT Directive. VAT is a revenue source for their national budgets as well as EU budget.
In principle, the following general rules apply: For trade between two VAT payers having their residences or registered offices in different EU countries, VAT is paid and claimed by the recipient according to the rules and rates valid in the recipient’s country of residence or registered office. Both participants in such trade must of course show these transactions in their accounting, VAT records, VAT returns and other related filings (e.g. EC sale list for goods delivered to other EU member states) in order to enable tax authorities to check them.
Most goods and services are subject to a 21% VAT rate in the Czech Republic, except food, pharmaceutical products, etc., in which case the 15% VAT applies. The Czech VAT system contains a concept of registration for VAT purposes in order to become a Czech VAT payer. In certain situations businesses may become the VAT payers automatically by law. Foreign companies may register as VAT payers without having an establishment (either seat or a fixed establishment) in the Czech Republic.
EU – one customs territory (example)
As the EU is considered as one customs territory, the following sample situations can occur:
If, for example, American goods are transported to the Czech Republic via the port of Hamburg, the Czech importer has two possibilities. He can either declare the goods for customs clearance through customs at the Hamburg customs office (i.e. the import customs duty and VAT are declared in Germany) or the Hamburg customs office can release the goods into a transit regime (T1 transit declaration) and the goods will subsequently be released into free circulation at certain Czech customs offices (i.e. the customs duty and import VAT are declared in the Czech Republic).
Export customs procedures can also be performed either by the Czech customs office or, in certain cases, by the customs offices of other member countries. In every case, however, the exported goods will leave EU territory through a border customs office (e.g. the Latvian customs office at the border with the Russian Federation).
However, exports and imports carried out by businesses in member states other than those where they are registered for as VAT payers may have VAT implications for these businesses in these countries.
The EU has concluded free trade agreements with a large number of countries around the world. When trading with third countries, it is recommended that businesses make sure whether preferential customs duty rates apply or not.
Authorized Economic Operator (AEO)
As part of a coordinated approach to secure international trade, the EU has introduced rigorous new procedures aimed at improving supply-chain security. The changes affect almost every aspect of any business that buys, sells or moves goods into or out of the EU. The AEO regime introduces an EU-wide
accreditation scheme. Obtaining of AEO status may help business to achieve various reliefs and simplifications in customs clearance proceedings.
Pre-arrival / Pre-departure Declarations
The obligation to file Pre-arrival/ Pre-departure Declarations came into force in 2009. It should accelerate the import and export of goods, i.e. it is mandatory for traders and freight forwarders to provide customs authorities with advance information (in electronic form) on goods brought into or taken out of the EU customs territory.