EET2: A Second Chance for Fiscalization in the Czech Republic
The previous year (2025) in the Czech Republic ended with the announcement that fiscalization (now referred to as EET2) would be reintroduced. The government has promised a system that will be better, cheaper, and mandatory for all taxpayers without exception. Among the proposed measures are the removal of the obligation to physically print invoices, an extended reporting deadline of up to seven days, and the suspension of inspections during the transition period.
This development follows the victory of the ANO party in the parliamentary elections. The same party that introduced the original EET fiscalization system in 2016, which we previously covered in another article.
The fiscalization project in the Czech Republic clearly demonstrates how strongly government policy influences the success of large‑scale system implementations. Fiscalization generally includes a large number of taxpayers, who are often resistant to additional obligations and increased tax inspections.
Experience shows that successful implementation requires the government to be consistent, supportive, fair, and balanced in its approach toward taxpayers in order to overcome this resistance.
From Resistance to Suspension
The Czech Republic is a notable example of long-standing taxpayer resistance to fiscalization. This resistance began to subside only after the ANO party came to power in 2015 and introduced fiscalization in phases. These phases started on December 1, 2016 (Phase 1), followed by Phase 2 on March 1, 2017.
However, resistance remained strong. After the first two successful phases (out of the planned 4), the opposition used one inconsistency between the Fiscal Law and the Constitution as an argument to halt the fiscalization of the other two groups (3 and 4). It took more than a year to amend that disputed provision.
Once the legal issue was resolved, the COVID-19 pandemic happened and was used to justify continuing the suspension, which officially took effect on March 27, 2020. During this period, even taxpayers who had already been fiscalized were no longer required to issue fiscal invoices, and fiscalization became voluntary.
This temporary state lasted for two years, after which fiscalization was permanently suspended on January 1, 2023. At that point, the main reason cited was the high cost of maintaining the system.
Covid or Policy Choice?
There are no known examples of fiscalization systems being fully suspended in other jurisdictions due to Covid. In most countries, fiscalization continued to operate, with some adjustments, such as reduced inspection frequency and more lenient enforcement.
The fundamental obligation to issue invoices remained in place everywhere, even if penalties were temporarily waived.
In the Czech Republic, however, the obligation to issue fiscal invoices was suspended entirely. This suggests that the decision was not a direct consequence of the pandemic, but rather a political choice in which Covid served as a supporting argument.
In retrospect, this approach proved problematic. Tax obligations are a fundamental component of public finance and must be maintained even in times of crisis. While certain tax measures, such as VAT rates, can be temporarily adjusted, the underlying obligation itself should not be removed.
Was Cost the Real Reason?
The Czech Republic started fiscalization as a completely new project, requiring high expenditures for new facilities, data centers, equipment, personnel, software, and ongoing operational costs.
These costs were planned based on an expected taxpayer base of over 700,000 entities by the end of Phase 4. However, implementation stalled after Phase 2, reaching only around 20% of the projected number of taxpayers.
At that level, the system processed approximately 12 million invoices per day. During the Covid period, this number dropped by half. Despite the reduced usage, operational costs remained aligned with the original full-scale projections, making the system appear disproportionately expensive.
Nevertheless, during the period of suspension, around half of the previously registered taxpayers continued to use fiscalization. This indicates that many had adapted to the system and recognized its benefits.
The Czech Supreme Audit Office (NKÚ) concluded in report 23/09 that cancelling the Electronic Sales Reporting (EET) system deprived tax authorities of a highly effective tool for identifying risks and enforcing compliance. The system enabled over 258,000 inspections, with a 96% rate of successful penalty collection.
