Czech Republic: VAT when delivery is temporarily suspended; post-merger depreciation

Czech Republic: VAT when delivery is suspended

A committee of the Chamber of Deputies and the General Financial Directorate discussed the following issues:

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  • From a value added tax (VAT) perspective, when there is a delay on the delivery of goods abroad because of a temporary suspension of transportation, and the goods are stored in another EU Member State but remain under the ownership of the Czech supplier, this type of delivery is considered to be a single delivery of goods that is exempt from VAT.
  • Concerning depreciation on improvements to leased assets after a merger of the lessee and the lessor, the successor company is to increase the cost or tax value of the asset, using the accelerated depreciation method by the amount or value of the improvements and then continue to depreciate the asset at the adjusted cost (or tax value) using the same rate of depreciation.

These items are discussed in more detail in a July 2016 report [PDF 580 KB] prepared by the KPMG member firm in the Czech Republic


Other topics covered in this KPMG report concern:

  • Proving the origin of assets to tax administrators
  • New measures under a program to enhance corporate employee education and improve the knowledge and skills of workers
  • A decision of the regional court in Prague that agreed to the tax administrator’s approach in a transaction identified under the “abuse of law” concept

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