• As a founding member of GATT (the General Agreement on Tariffs and Trade), the CR applies import duties according to the valid and internationally recognised customs tariff.
  • In terms of customs duties, the CR is very liberal. Czech customs duties have been brought into alignment with the European Union customs framework, eliminating customs duties payable on most goods destined to the EU. Further trade benefits also exist through the Central European Free Trade Agreement, to which the Czech Republic, Slovakia, Poland, Hungary and Slovenia are signatories.
  • Exempt from import duties are certain selected types of goods; goods not subject to customs clearance (for personal use by diplomats, members of government, etc.) and goods located in customs-free zones and storehouses.

In terms of Czech government economic correction measures were approved the so-called import deposits, i.e. importers of foodstuffs and consumer goods have to put down no-interest deposit worth 20% of the imported goods value and its freezing at the determined banks for 180 days. The importer will have to prove to the Customs the putting down of the compulsory deposit as a condition for letting the goods into the country and its releasing into "free circulation".

Customs relief - the legal framework of the Czech Republic's customs law is, in essence, the same as the European Union's. In the view of the minimum use of non-tariff barriers to trade, the import/export regime of the Czech Republic can be described as very liberal and transparent. Moreover, the extensive use of preferential rates brought the average estimated customs rate for 1996 down to only 3.8%.

The basic terms of the customs law include the term declarent, who must be a legal Czech subject ie, a person residing in the country or a corporate body based in the territory. As in other regimes the declarent can appoint a representative to handle the customs declaration.

Inward Processing Relief is available in respect of material, components and sub-assemblies imported for processing and export. The "Europe Association Agreement" between the Czech Republic and the EU will lead to a genuine free trade zone covering the Republic and the EU member states within five years. Products made in the Czech Republic from components imported from EU countries and then exported to the EU pay no duty in the destination country.

Where the "the local (Czech) content" value added is at least 60 % there is often no import duty on products manufactured and shipped from the Czech Republic into the EU countries.

Certification of products originating in the CR for the purposes of customs relief is available according to the following conditions. An EUR 1 certificate is issued for products manufactured in the CR from materials and components originating in the CR or EU and who's value must comprise 60% or more of the total value of the completed product. Products certified EUR 1 for export to the particular destinations may receive tariff reductions according to the following schedule:

Destination    1995       1996      1997        1998

EU             no duty    no duty   no duty     no duty
Slovakia       no duty    no duty   no duty     no duty
Hungary        33%        66%       no duty     no duty
Poland         25%        50%       75%         no duty

There are 11 Customs Free Zones in the Czech Republic so far. These free zones are located in the following locations;- four in Prague, two in Zlin, and one each in Ostrava, Pardubice, Hradec Kralove, Cheb and Toinec The main benefit within these zones relates to cash flow as, in addition to inward processing relief, no VAT on import duty is incurred.

Agreements on simplifying formalities for goods exchange and a common transit regime between the Czech Republic and EU and EFTA states came into effect August 1, 1996. These agreements will allow goods transportation to any of the signatory countries with only customs documents issued in the Czech Republic. Similar agreements were signed with Slovakia, Hungary and Poland. Customs formalities will thus be reduced to a minimum and ease border crossings.

The Government is currently reviewing the prospect of further reducing the customs tariff on technologically advanced and environmentally friendly goods and is considering granting relief on imported, technologically advanced capital equipment.

For further information contact CzechInvest at Politickych veznu 20, 112 49 Prague 1, Czech Republic Phone (420-2) 2422-1540 Fax: (420-2) 2422-1804

NOTE: Although we have made every effort to ensure the reliability of our sources, CzechInvest does not assume responsibility for its accuracy.