EET 2.0 for Cash and Non-cash Payments

The Ministry of Finance plans to return to electronic records of sales (in Czech: elektronické evidence tržeb, known as “EET”) from 2027, but this time in a fundamentally more modern and simpler form compared to the original system from 2016–2022. The new EET 2.0 is to focus primarily on payments made during personal contact with the customer and also offer a simplified mode for small businesses. The declared compatibility with most existing POS devices is important news for businesses, while the Ministry of Finance is also promising a free government app for mobile phones, tablets and computers.

In addition, the Financial Administration is saying that it wants to use the data obtained through EET 2.0 mainly for advanced data analytics and more precise targeting of tax inspections. Instead of blanket inspections, it should focus more on risky and non-standard transactions.

What is a contact payment and why are we no longer focusing on cash only?

One of the main differences between the original EET and the upcoming EET 2.0 is the new definition of recorded payments. The original EET was mainly focused on cash sales and similar payment methods. EET 2.0 is to be better adapted to current payment methods and therefore introduces the concept of a contact payment, from which everything else will follow.

A contact payment is understood to mean a payment made when the entrepreneur and the customer are in personal contact or in connection with ordering or receiving goods or services at the entrepreneur’s premises. It is therefore not the form of the payment that is decisive, but the circumstances in which it is made.

Due to this, not only cash payments, but also non-cash payments made “on the spot” are to be included in the records. Typically, they will be card payments at a terminal, QR payments made in an establishment, direct debits, electronic vouchers, meal cards and some mobile device payments. The draft also provides for records of certain alternative payment methods, including virtual assets and prepaid cards.

What is a distance payment and why can it save us?

On the contrary, ‘distance payments’ are to remain outside the records. They are transactions carried out without personal contact between the customer and the entrepreneur. Typically, they will be classic bank transfers based on an invoice, payments via online payment gateways in e-shops or QR payments made via a web interface.

If a customer orders goods online and pays by bank transfer from his/her account before delivery, such transaction should not be subject to records of sales. However, if he/she pays for goods upon collection, such payment will be included in the records. In practice, the combination of an e-shop and a brick-and-mortar store could lead to a number of borderline situations that require the correct setup of internal processes.

Do small entrepreneurs also have to participate in EET 2.0?

In general, the duty to maintain records is not introduced from a certain volume of sales, so it also applies to small entrepreneurs. The draft, however, envisages a mode called “EET OFF,” which is intended for the smallest entrepreneurs in the first flat-rate tax band with annual revenues of up to CZK 1 million.

These entrepreneurs will be able to decide whether to record their sales as standard or to use the alternative mode without records. However, they will pay an increased flat-rate tax for this exemption. The draft provides for an increase in the tax component of the flat-rate tax by CZK 1,400 per month, i.e. from the current CZK 100 to CZK 1,500 per month, while the standard social and health insurance contributions will continue to be paid.

What are the other differences compared to EET 1.0?

Compared to the original EET, the scope of recorded data is to be limited significantly. Only basic information is to be recorded, i.e. the taxpayer’s identification details, the date and time of the transaction, the serial number of the sale, the establishment and the amount. Unlike the original system, neither individual purchase items nor customer details are to be recorded. At the same time, the automatic duty to print a receipt is to be abolished; the customer will only receive it on request or electronically.

The scope of the entities that will be affected by EET 2.0 should also be different. The original system was introduced gradually on a sector-by-sector basis, while the new model is to be rolled out at one time to all entrepreneurs accepting contact payments, regardless of the sector they operate in. At the same time, however, some exceptions are envisaged, in particular for specific activities of a charitable or social nature, for financial institutions, payments at a vending machine or entrepreneurs with a minimum amount of cash income.

The duty to post signs about EET records in individual establishments will also no longer apply.

When will it be launched and in what form?

We would like to point out that at this moment it is still unclear in what final form the new legislation will be adopted or whether the EET 2.0 system will actually be launched as of 1 January 2027. The draft legislation may still undergo significant changes during the approval process.

In the case of the original EET, card payments were initially to be part of the records, but the Constitutional Court subsequently exempted them from the EET system on the grounds that non-cash transactions create a sufficient electronic trail. The question of records of non-cash payments may therefore be the subject of further expert and legal discussion even in the case of EET 2.0, and further review by the Constitutional Court cannot be ruled out.

The introduction of EET 2.0 is to be compensated for by tax breaks for entrepreneurs. VAT on soft drinks in restaurants is to fall from 21% to 12% and tips of up to 7% of an enterprise’s sales are to be exempt from tax. Also under consideration is the cancellation of the ceiling on the exemption for employee benefits, the reintroduction of tuition fees and the student discount.

We will continue to monitor developments in the legislative process and keep you informed about the final form of the legislation passed.

Best regards,

Team WTS Alfery, Alfery Hrdina Advokáti