§ 74b ZDPH, effective from 1 January 2025, introduces a new approach to VAT deductions: if the obligation is not paid, the deduction must be adjusted. The principle “no payment — no deduction” is no longer just a recommendation — it is now a binding rule, and failure to comply may result in sanctions.

To correctly apply § 74b in practice, it is essential not only to understand the principle itself but also to clearly know when the obligation to return the deduction arises, how to calculate the deadlines, how to handle partial payments, and whether the tax can be reclaimed after payment. In this article, you will find a practical guide: which obligations are considered unpaid, how the six-month period after the due date (splatnost) is calculated, when the rule applies, and when it does not.

When the Obligation to Return VAT Deduction Arises

The obligation to return a previously claimed VAT deduction arises at the moment when all three conditions defined in § 74b ZDPH are met:

• The VAT deduction was claimed on the invoice. The taxpayer included the respective invoice in their VAT return and exercised the right to deduct (odpočet). If no deduction was claimed for the given transaction, no adjustment is required — there is no basis for repayment.
• The obligation has not been fully paid. The invoice remains unpaid or only partially paid. It does not matter whether part of the contractual obligation was fulfilled; the key criterion is the actual receipt of funds. If only part of the amount has been paid, the unpaid portion is considered a závazek po splatnosti (obligation past due).
• The statutory period after the due date has expired. By law, the obligation to adjust does not arise at the moment of payment delay but after the expiration of a six-month period counted from the end of the month in which the due date (splatnost) occurred. It is the expiration of this period that triggers the povinnost opravy — the obligation to return the deduction for the unpaid portion.

When all three conditions are met, the VAT payer must report the corresponding adjustment in their VAT return for the period in which the six-month period expires.

Thus, the rule can be expressed in a simple formula:
unpaid obligation + claimed deduction + expiration of the statutory period = obligation to return VAT on the unpaid portion.

What Qualifies as an “Unpaid Obligation” under § 74b

To apply § 74b ZDPH correctly, it is essential to understand what is meant by an unpaid obligation.

In the context of VAT, a závazek po splatnosti (obligation past due) refers to a situation where:

• the agreed due date (splatnost) stated in the invoice or contract has already passed;
• by that time, no payment has been received from the client (or only a partial payment was received).

As long as the due date has not yet passed, the obligation is considered current. Lack of payment within the agreed period does not create an obligation to adjust anything for VAT purposes — it is still part of the normal course of payment processing.

Once the due date (splatnost) has expired and payment has not been received, the obligation becomes overdue (závazek po splatnosti). From that moment, it falls under § 74b, and the six-month period begins to count.

Partial payments should be considered separately. If the client pays only part of the amount:

• the paid portion of the obligation is considered fulfilled;
• the remaining unpaid amount after the due date is treated as a závazek po splatnosti (in respect to the unpaid portion).

The key reference point for § 74b purposes is the agreed due date (splatnost), as stated in the contract or invoice. The DUZP (den uskutečnění zdanitelného plnění – date of taxable supply) is secondary here. The law links the notion of overdue status and the start of the six-month countdown to the payment due date, not to the moment the VAT liability arises.

What Does “6 Calendar Months After Splatnost” Mean

A key element of § 74b is the six-month period after which the taxpayer becomes obliged to return the VAT deduction for an unpaid invoice. To apply this rule correctly, it is important to understand how this period is calculated.

First, the countdown does not begin on the actual due date (splatnost), but from the end of the calendar month in which the due date occurred. For example, if the due date is March 15, the starting point is not March 15 but March 31.

Second, the rule refers to six calendar months, not 180 days. This means:

• March → April = first month
• May = second
• June = third
• July = fourth
• August = fifth
• September = sixth

So, if the due date was March 15, the six-month period ends on September 30. If the obligation is not fully paid by that date, the taxpayer incurs a povinnost opravy – the obligation to adjust and return the previously claimed VAT deduction.

Third, the tax authority does not send any notification about the expiration of this deadline and does not initiate the adjustment automatically. The taxpayer must monitor the dates independently – based on internal records and unpaid obligations registers. The six-month period serves as a formal trigger: after it expires, any unpaid debt automatically falls under § 74b, and the corresponding VAT deduction must be reversed.

The Obligation Arises Automatically: No Reminders Will Be Sent

The obligation to return the VAT deduction for an unpaid invoice does not depend on the actions of the counterparty or any initiative from the tax authorities. § 74b ZDPH applies automatically: once the conditions are met, the taxpayer is required to reflect the adjustment in their VAT return.

The financial administration does not send reminders and does not “activate” the obligation through a separate decision. Monitoring payment due dates (splatnost), maintaining a register of unpaid obligations (závazky), and checking the expiration of the six-month limit — all fall under the taxpayer’s (or their accountant’s) responsibility.

If the VAT deduction is not adjusted by the end of the six calendar months after splatnost, it is treated as an error in the VAT return (tvrzení daně), even if all primary documentation is formally correct. Without an effective internal control system, complying with the practical requirements of § 74b is nearly impossible.

How Partial Payment Affects the Obligation to Adjust the Deduction

§ 74b ZDPH applies not only to fully unpaid invoices, but also to situations where the client has paid only part of the amount. However, the obligation to return the VAT deduction arises only for the portion that remains unpaid.

If the obligation is partially paid before the end of the six-month period, the logic is as follows:

• the paid portion retains the right to deduction (no adjustment is required for it);
• the unpaid balance is treated as a závazek po splatnosti (obligation past due);
• only the portion of VAT corresponding to the unpaid amount must be adjusted.

If the partial payment is made after the six-month period has expired, the situation is different. At the time the deadline passed, the taxpayer incurred the povinnost opravy (obligation to adjust) for the entire unpaid part, and the deduction for that amount must be returned. A later payment entitles the taxpayer to restore the deduction, but under a different procedure and in a different tax period (based on the actual payment date).

The core principle is simple: not the entire originally claimed deduction is adjusted, but only the part that is not covered by an actual payment.

Multiple Payment Due Dates (splatnosti): How to Calculate the 6-Month Period

In practice, there are cases where payment for a single contract or invoice is split into several parts, each with its own due date (splatnost). For the purposes of § 74b ZDPH, this means that the six-month period is calculated separately for each such part of the obligation.

Typical scenarios include:

• a single invoice includes staged payments with different splatnost dates;
• the contract provides for interim payments (zálohy, doplatky), each with its own individual payment deadline.

The approach in these cases is as follows:

• for each amount with a separate splatnost, an independent six-month period is counted;
• if one part is not paid, the povinnost opravy (obligation to adjust) for that portion may arise earlier than for other parts of the same contract or invoice;
• as a result, the obligation to return the deduction may arise at different times for different portions of the same document.

This significantly complicates bookkeeping. The taxpayer must track not only the overall “paid/unpaid” status of the contract but also the allocation of specific payments to specific due dates under that contract or invoice.

The key principle to understand here is: each part of the obligation with its own splatnost has its own timeline in the context of § 74b and its own six-month period for monitoring the povinnost opravy.

Which Documents Confirm the Fact of Non-Payment

To correctly apply § 74b ZDPH and be prepared for a possible tax inspection, the taxpayer must not only track payment deadlines but also have documentary proof that the obligation was indeed not fulfilled. The basic set of documents includes:

• Invoice with specified payment due date (splatnost). This shows when the obligation was expected to be fulfilled.
• Bank account statements. These reflect whether and to what extent payments from the specific client were received for the specific invoice.
• Internal register of unpaid obligations (neuhrazených závazků). This may be a spreadsheet or report from accounting software that lists all unpaid (or partially paid) invoices, including their splatnost dates and payment statuses.
• Contracts with clients that specify payment terms (including splatnost date, possible staged payments, zálohy, doplatky, etc.).

It is important to understand that for the purposes of § 74b, non-payment refers to the absence of funds received to the account details specified in the contract or invoice by the agreed deadline. An obligation is considered unpaid not when a reminder or complaint is sent, but when—after the splatnost deadline—there is no corresponding payment shown in the bank statement.

These documents form the foundation for both the taxpayer’s internal control and their position in any potential dispute with the tax authority.

Typical Situations: When the VAT Deduction Must Be Returned and When It Can Be Reclaimed

In practice, working with § 74b usually comes down to several recurring scenarios. Below are two basic cases (without formulas or complex calculations).

Deadline Passed – Deduction Must Be Returned

Scenario:

• An invoice was issued, recorded in the books, and a VAT deduction was claimed on it.
• The due date (splatnost) arrived, but full payment was not received.
• Six calendar months pass from the end of the month in which the due date fell.
• By this time, the invoice is still not fully paid (or not paid at all).

At this point, a povinnost opravy (obligation to adjust) arises for the unpaid portion. The taxpayer must reflect the adjustment in the VAT return for the period in which the last day of the six-month period falls. Only the portion of the deduction related to the unpaid balance must be adjusted.

Customer Paid Later – How to Restore the Deduction

Scenario:

• The taxpayer fulfilled the requirements of §74b: adjusted the VAT return and returned the deduction for the unpaid part of the invoice.
• After some time, the client eventually pays the debt — either in full or in part.
• At the moment the payment is received, the taxpayer regains the right to claim a VAT deduction for the paid portion.

This deduction is not “reinstated” retroactively in the period when the adjustment was made. It is claimed again in the tax period in which the payment was actually received, and in accordance with the rules effective after 2025.

Types of Supplies Not Covered by the Rule

When working with §74b, it’s essential to understand not only when a deduction must be returned, but also the situations where the rule on unpaid invoices does not apply — even if a payment is overdue.

In the context of the obligation to return the deduction due to non-payment, §74b does not apply if the transaction involves:

• Operations under the reverse charge regime (in such cases, the tax liability is transferred to the recipient, and VAT is calculated under special rules; the six-month deduction return mechanism does not apply here);
• Certain specific services received from abroad (některé služby ze zahraničí), for which the place of supply and VAT treatment are determined separately;
• Import of goods (dovoz), where VAT is paid through customs and a different VAT regime applies.

Key point: Even if such operations involve non-payment or an overdue závazek, the §74b mechanism (“six months after splatnost”) is not triggered. The obligation to adjust the deduction due to non-payment does not arise under §74b and must be assessed under other provisions of the law.

Controlling §74b ZDPH in Practice: How to Avoid Mistakes and Keep Your VAT Deduction

The obligation to return the deduction on unpaid invoices is not a recommendation or a matter of agreement with the counterparty. It is a direct legal requirement set out in §74b ZDPH. Once the conditions of the article are met, the deduction adjustment becomes a duty for the taxpayer — not an option.

In practice, this comes down to several key checkpoints that must be monitored continuously:

• the splatnost date for each invoice;
• the end of the six-month period after splatnost;
• the status of payment: whether it has been paid in full, partially, or not at all.

Without a systematic process for monitoring unpaid invoices, complying with §74b is nearly impossible. You either need a well-organized internal process with records, reminders, and regular reconciliations, or the support of a professional accountant who can take over this monitoring and ensure that all necessary adjustments are reflected in the VAT declaration in due time.

Professional Support for Complying with §74b ZDPH and VAT Deduction Adjustments

Venera Service Delivery s.r.o. will help your business adapt to the requirements of §74b ZDPH, in force in the Czech Republic since January 2025. Our experts will analyze your current payment management system, verify the accuracy of VAT deduction practices, implement control of the six-month period, and help you avoid penalties.

We will audit your VAT obligations, minimize tax risks, and ensure proper handling of deductions under the §74b framework. For a consultation on VAT refund issues or other tax-related matters, contact our specialists.