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Czech Republic: Proposed VAT amendments; VAT examinations

Czech Republic: Proposed VAT amendments; examinations

The KPMG member firm in the Czech Republic has prepared reports about the following tax developments.


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  • Amendment to VAT law: An amendment to the VAT law, effective 1 January 2017, would repeal special rules on societies (formerly associations without legal personality) and would introduce a local reverse-charge mechanism to be applied with respect to the provision of personnel for construction and assembly work and to various forms of forced delivery of property. The amendment also introduces a new type of taxable entity—the “unreliable person”—and expands the concept of liability for unpaid VAT so as to include instances in which consideration for taxable supplies is provided in a virtual currency. 
  • Dealing with VAT inspections: Previously, during VAT inspections, businesses may have had concerns about the ability to prove the receipt of supplies from an uncontactable supplier or their supplier’s involvement in VAT fraud without the recipient’s knowledge. A recent Supreme Administrative Court judgment indicates this area’s future direction. 
  • EU harmonisation of voucher taxation: A new EU directive regulating vouchers aims to harmonise rules for the application of VAT on transactions with vouchers within the EU and eliminate the double taxation or non-taxation of these transactions. The new rules will be effective 1 January 2019. 
  • Competitiveness program: An up-to-date timetable of calls for applications under the Enterprise and Innovations for Competitiveness Operational Programme (OP EIC) has been announced.  
  • Second call for research support program: In early October 2016, the Ministry of Industry and Trade announced a second call for participation in a program to support research and development (the “TRIO” program) as designed to support projects focusing on industrial research and experimental development relating to key technologies. Companies operating in Prague may also apply this time. 
  • Proving the origin of assets: A bill about proof of the origin of assets has completed the legislative process. The Senate made the original proposal even stricter by lowering the threshold for proving the origin of income to CZK 5 million. 


Read an October 2016 report prepared by the KPMG member firm in the Czech Republic

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