How EU Regulations Affect Czech Businesses

The EU AI Act: New Rules of the Game for Technology

The Artificial Intelligence Act creates the world's first comprehensive legal framework for the development, deployment and use of AI. Although the debate often focuses on technology giants, the regulation will also affect Czech companies in traditional industries that integrate AI into their processes, such as HR systems or quality control. The Act entered into force in August 2024 and its provisions apply in stages, which requires careful monitoring of the implementation timeline.

In terms of timing, a key milestone is February 2025, when the bans on practices deemed to pose an unacceptable risk take effect. These include, for example, social scoring systems, biometric categorisation based on sensitive characteristics and certain forms of manipulative techniques. Czech businesses must make sure that none of their systems, or their suppliers' systems, fall into this category; otherwise they face immediate withdrawal from the market and heavy penalties.

For most companies, however, the central part will be the regulation of so-called high-risk AI systems, which applies in full from August 2026. High-risk systems include AI used in critical infrastructure, education, employment, access to essential services and creditworthiness assessment.

Obligations for deployers in the Czech Republic will include:

• ensuring human oversight of AI systems,

• using high-quality data to minimise bias,

• keeping detailed technical documentation and records,

• carrying out a fundamental rights impact assessment in certain cases.

In the Czech Republic, compliance will be supervised by existing regulators within their sectoral remit, with the competent authorities taking on a coordinating role for the digital economy. Czech businesses should view the AI Act not only locally but also in the context of cross-border services, where the interpretation of the rules may differ in detail between member states.

Sustainability Reporting and Supply Chains

The Corporate Sustainability Reporting Directive fundamentally changes how companies report non-financial data. Although in the first wave the direct obligation applies primarily to large public-interest entities, the impact on the Czech market is much broader because of the supply-chain effect.

Its transposition into the Czech Accounting Act extends the scope of obliged entities gradually. Large public-interest entities report from 2025, other large undertakings from 2026 and listed SMEs from 2027, with an option to defer.

It is worth pointing out a common misconception about deferrals and the political debate on adopting sector-specific standards. The core timeline for introducing the CSRD and the general standards remains valid for most companies.

For Czech suppliers, the critical reality is the transfer of obligations along the chain. Large multinational corporations already require precise data on carbon footprint and social aspects from their Czech subcontractors so that they can meet their own reporting obligations. A Czech company may therefore be forced to collect data and report under ESG standards purely out of the commercial need to stay in the supply chain.

Data Protection in the Era of AI and Data Flows

The GDPR remains the cornerstone of data protection, but its application is moving into technically more complex areas. In the coming period, supervisory authorities are focusing on sophisticated aspects of processing, such as the use of personal data to train artificial intelligence models and the right to erasure in complex systems.

A warning signal for Czech companies was the record fine imposed in 2024 on a leading technology company for unlawfully processing user data and transferring it to a subsidiary. The case highlighted that even pseudonymisation may not be sufficient where there is a risk of re-identification, and that cross-border data flows require a robust legal basis.

In an international context, the One-Stop-Shop mechanism is essential. If a Czech company processes data of citizens from several EU countries, it deals with disputes primarily through the lead supervisory authority, but the concerned authorities from other countries also take part in the process. Coordinating a legal defence in such cases requires expertise that goes beyond local Czech law.

Energy Efficiency and New Obligations for Industry

The revised Energy Efficiency Directive brings new obligations for Czech businesses intended to accelerate the decarbonisation of industry. The key energy consumption thresholds that trigger the new obligations are being transposed into Czech legislation in stages.

Above the set limits of average annual consumption, companies must have a certified energy management system in place. Companies with lower but still significant consumption must carry out an energy audit. A major new requirement is the obligation to draw up an action plan to implement the audit recommendations that are technically and economically feasible.

The "energy efficiency first" principle is also being introduced. When deciding on new investments in assets above set thresholds, or in public procurement projects, it will be necessary to demonstrate that more energy-efficient solutions were considered. For international investors and developers in the Czech Republic, this means more careful due diligence in acquisitions and in the construction of industrial facilities.

Digital Services and Cybersecurity

The Digital Services Act applies to providers of intermediary services, online platforms and search engines. Companies must have processes in place for content moderation, algorithmic transparency and user protection. For Czech e-shops and platforms expanding into the EU, this means aligning their terms and processes with uniform rules across the market.

In cybersecurity, the dominant topic is the NIS2 Directive and its transposition into Czech law. NIS2 significantly broadens the range of obliged entities in sectors such as energy, transport, banking, healthcare and manufacturing.

A key aspect of the new rules is management liability. Statutory bodies will be personally responsible for ensuring cybersecurity and face penalties for inaction.

Companies must also manage supply-chain risks. In practice, regulated entities will contractually pass security requirements on to their IT service and technology suppliers, which will affect the entire market.

Tax Harmonisation and the Global Minimum Tax

In tax, the implementation of the Pillar Two rules is crucial for internationally active groups. The Czech Republic has adopted the Top-up Taxes Act, which ensures that multinational groups with consolidated revenue above the set threshold are subject to an effective tax rate of at least fifteen percent.

Although the nominal corporate tax rate in the Czech Republic is above this level, calculating the effective tax rate is a complex process involving a number of adjustments and exceptions. If a Czech subsidiary uses investment incentives or R&D tax deductions, its effective taxation may fall below fifteen percent, triggering an obligation to pay a top-up tax.

This agenda requires close coordination between headquarters and subsidiaries in different jurisdictions, as the data for the calculation is collected globally. Platforms that enable centralised collection of tax data and communication between tax advisors in different countries are becoming essential. The implementation of directives increasing transparency and the volume of data reported to tax authorities also continues.

Accessibility of Products and Services

The Czech Republic has implemented the European Accessibility Act through the Act on Accessibility Requirements for Certain Products and Services, which takes effect in June 2025. The law covers e-shops, banking services, electronic communications, terminals and e-book readers.

Czech companies that sell products or services to consumers in the EU must ensure that their digital interfaces are accessible to persons with disabilities. Failure to comply may lead to penalties and the need to withdraw products from the market, which is a risk especially for exporters of software and electronics.

The Transformation of Legal Matter Handling and the Role of Anywhere.legal

As regulation grows more complex and more international, the way companies handle their legal and tax matters is changing too. The traditional model of a single local legal representative is no longer sufficient in a cross-border context. Czech businesses expanding abroad or facing EU regulation need coordination across multiple jurisdictions, narrowly specialised experts and an efficient process for centralising documents.

This is where a solution such as Anywhere.legal comes in. It is not just about using artificial intelligence, but about a comprehensive platform for managing cross-border matters.

AI serves as a supporting tool that helps structure the brief, analyse initial documentation and suggest procedural steps without replacing expert judgement. The main added value lies in connecting technology with an international network of vetted experts.

A client can submit a request through the platform, and the system then connects them with the relevant specialists in the countries concerned. This eliminates the chaos of email communication, keeps documents secure and speeds up the entire process from brief to resolution.

Conclusion: A Systematic Approach as a Competitive Advantage

2026 will test the resilience and adaptability of Czech businesses. The accumulation of regulatory requirements puts pressure on administrative capacity, but it also offers an opportunity for those who approach compliance strategically.

Compliance with EU rules should not be seen merely as a necessary evil but as a prerequisite for taking part in the single European market and in global supply chains. Companies that can effectively manage their legal and tax obligations across borders – whether in-house or with platforms such as Anywhere.legal – will gain an advantage in the form of greater trust from investors, customers and partners.

Frequently Asked Questions (FAQ)

1. What penalties apply for breaching the EU AI Act?
Penalties are tiered by severity. Breaching the ban on prohibited practices can lead to a fine of up to EUR 35 million or 7% of worldwide annual turnover. Penalties for breaching obligations relating to high-risk systems are lower but still significant. Importantly, supervisory authorities can also order a system to be withdrawn from the market.

2. Does my company have to report under the CSRD if it is only a supplier?
If your company does not meet the criteria for the direct obligation, you do not have to publish your own sustainability report under the law. However, your customers will probably ask you for data on your carbon footprint and working conditions so that they can meet their own obligations. Failing to provide this data may lead to lost contracts.

3. Does NIS2 apply to all companies?
No. NIS2 applies to entities in regulated sectors that meet the size criteria. In certain critical cases, however, it also applies to smaller entities, for example where they are the sole provider of a service in a member state. The exact criteria are set out in the new Cybersecurity Act.

4. How does Anywhere.legal help with international tax?
The Anywhere.legal platform makes it possible to structure a tax issue and connect the client with specialised tax advisors in the relevant countries. It enables secure sharing of sensitive financial data and coordination of the approach, which is key, for example, when dealing with VAT on cross-border transactions or setting up transfer pricing.

5. By when must my website and services meet the new accessibility law?
The Accessibility Act takes effect on 28 June 2025. By that date, the companies concerned should ensure that their new services and products meet the accessibility requirements. Transitional periods may apply to existing services, but it is advisable to carry out an audit as soon as possible.