As from 1 April 2017, Czech Republic has simplified the reporting rules regarding deduction of input VAT by partially exempt businesses. This deduction was previously required within the calendar year in which VAT became deductible. This time limit has been extended, with certain restrictions, to any reporting period within the statute of limitations.
Most European countries allow input VAT to be deducted at any point within the statute of limitations. However, countries like Poland require purchase invoices to be deducted in the period when VAT was incurred or the following period. Also in Denmark,...Read more
Czech Republic introduced the VAT ledgers return last January 2016. This new VAT reporting obligation, also known as Control Report, required all taxpayers to report details of each AR and AP transaction on a periodic basis. Despite the efforts of the tax authorities to publish manuals and FAQ reports on the new requirements, taxpayers have struggled to comply with all system and content requirements.
The Czech government amended the VAT law on 29 July 2016 to waive certain penalties when this return is not submitted for an admitted reason. When a VAT ledgers return is missed, the taxpayer can apply for a waiver...Read more
The Czech tax authorities have expanded the use of reverse charge to wholesale supplies of selected telecommunication services. The new rules apply as from 1 October 2016.
Czech Republic extended the reverse charge mechanism to electricity and gas last February. This mechanism was then extended to all supplies of goods and services made by non-established companies . And last year Czech Republic requested the European Commission to allow a general reverse charge mechanism on all domestic supplies. All these changes had a positive effect reducing VAT fraud in the country, so the Czech government has now...Read more
The Czech government has introduced important changes in the Czech VAT Act. The tax office in charge of non-established VAT registered companies will change from Prague 1 to Ostrava tax office. All VAT registered businesses must take this change into account when contacting the tax authorities or submitting additional information in the course of an audit.
Also, the penalties for not complying with the new Control Report have been increased. This report was introduced last year and is now required from all registered taxpayers. Following the first year of implementation, the authorities will impose...Read more
Increasing VAT compliance requirements has a direct positive effect on tax collection. This is the conclusion published by the Czech tax authorities after 12 months of additional controls, returns and measures to reduce tax fraud. The Czech government has published a report providing numbers to this success story. Tax collection increased by an average of CZK 70 billion every year. This increase is not only due to VAT measures but also to other developments in social security and health insurance contributions.
During the last twelve months, he Czech government introduced a new VAT compliance obligations...Read more
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