Czech Republic: VAT guidance, customs reporting

Czech Republic: VAT guidance, customs reporting

The KPMG member firm in the Czech Republic has prepared a report about the following tax developments:

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  • Justifying not filing a VAT ledger statement: An amendment to the the value added tax (VAT) law, effective 29 July 2016, allows for the waiver of certain penalties for the failure to file a VAT ledger statement, as well as the automatic waiver of a penalty of CZK 1,000 a year for a delay in submission. When a VAT ledger statement is not properly filed for “justifiable reasons,” the taxpayer may apply for the waiver of the related penalty, by remitting a user fee of CZK 1,000. New guidance (instruction D-29) specifies the rules when VAT-related penalties can be waived and defines “justifiable reasons.”
  • Interest on VAT-related excess deductions: Two years ago, the Supreme Administrative Court issued its decision in the Kordárna case, and held that the VAT-payer was entitled to interest at a rate of more than 14% for the period during which the tax authorities retained the VAT-payer’s “excess deductions.” Subsequent to this decision, there have been a number of similar disputes between VAT-payers and the tax authorities, with all having been resolved in the VAT-payer’s favor. VAT-payers that have not pursued their claims can still apply for a payment of interest.
  • Changes in Intrastat reporting: A new customs law and decree to implement certain provisions relating to statistics have been in effect since 29 July 2016. Intrastat reporting has been amended, and changes must first be reflected in the August 2016 Intrastat declaration.
  • Subsidy grant programs: A subsidy grant program is continuously evolving, and at the end of July 2016, an extraordinary call—known in English as “Potential II”—was announced and then almost immediately cancelled at the end of August following a decision of the Ministry of Industry and Trade to increase the amount of funds for distribution within the Potential I first call. The assessment part of the first call is still in process.
  • Quicker issuance of employment cards to Ukrainians: At the end of July 2016, the government approved a special treatment regime for qualified persons from Ukraine to accelerate the acceptance and handling of employment card applications filed by Ukrainian candidates.
  • Reverse-charge system for telecommunications: The government approved an extension of a reverse-charge system for selected telecommunication services provided on a wholesale basis, effective 1 October 2016. The objective is to address potential fraudulent supply chains and to eliminate the transfer of these fraudulent practices from neighboring EU Member States to the Czech Republic.
  • Electronic reporting of sales: The tax authorities issued guidance on the electronic reporting of sales, clarifying certain issues associated with reporting and the initial scope of the reporting duty. 

 

Read a September 2016 report [PDF 2 MB] prepared by the KPMG member firm in the Czech Republic: Tax and Legal Update

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