In our previous article about the electronic record of sales (read it here) we discussed the interventions of the Constitutional Court into the e-sales system, and we also mentioned future changes which the amendment of the Act on registration of sales shall bring. At the time of writing, the amendment was at the beginning of its legislative process, which has not been smooth and without obstruction. The draft law is currently on its way to the Senate, it has already been discussed in the Chamber of Deputies and a number of amendatory proposals presented by the deputies were incorporated into it. In this article we will focus on those changes to the originally proposed amendment which were brought forth by these deputy proposals.

Start of the following phases

In relation to e-sales, every entrepreneur wants to know when will their activity be subject to the registration duty. The amendment as such will enter into force on the first day of the calendar month following after the day of its declaration. However, the next phase of the electronic record of sales (the originally 3^rd and 4^th phases were merged into one) will begin six months after the amendment takes effect. The extension of e-sales will thus certainly not happen on January 1^st, 2020 but more likely at some point during the first half-year of 2020, depending on what happens during the discussions in the Senate.

Exclusion of sales from the electronic record of sales

Based on the amendatory proposals the sales of freshwater fish (during the period before Christmas) will be excluded from e-sales. They were already excluded by a government decree, but that decree lost its force after the Constitutional Court’s decision.

Excluded sales will continue to include sales from provision of social services in healthcare establishments, retirement homes, homes for people with disabilities, outpatient and field social services, etc.

Special regime

The biggest novelty that the amendment will introduce is definitely the special regime of record of sales (this regime is described in our previous article which is linked above). Following the standard and simplified regimes, it is the third regime for the electronic record of sales. Employment of this regime will be voluntary and available only to persons not liable to value added tax, ergo selected legal persons (only providers of healthcare services covered by public health insurance) and natural persons.

It will also have to include so called small entrepreneurs for the definition of which the amendment lists a few conditions:

1. they conduct their business activity with only 2 or less employees,
2. the amount of registered sales (i.e. sales which are subject to e-sales) does not exceed 600.000 CZK for 4 immediately preceding calendar quarters, and

• the expected amount of recorded sales during 12 immediately following calendar months does not exceed 600.000 CZK.

Compared to the original proposal, we can see an increase of the limit in items ii. and iii. from 200.000 CZK to 600.000 CZK. These conditions must be met not only upon the submission of a request to employ the simplified regime, but the entity must also make sure to comply with these conditions continually. And if the entity surpasses one of those limits, the Tax Administration must be notified at once.

We will keep following the legislative process of the amendment and inform you about any developments on our website.

Michal Scholtz & Milan Kolář