Investor Presentaiton

Recovery of input VAT In general, a Czech VAT payer is entitled to de- duct input VAT in respect of received supplies used for the VAT payer's own business activ- ity. Input VAT can be claimed within three years after the end of the tax period in which the tax- able supply was made. A VAT payer must have a VAT invoice to exercise the right to deduct input VAT (a VAT document). A VAT payer is generally not entitled to deduct input VAT on taxable supplies used for VAT ex- empt supplies, representation (entertainment) or non-business purposes. A partial VAT deduction could be claimed in respect of taxable inputs related to both types of supplies, i.e. those qualifying for deduction of input VAT and those not qualifying for de- duction (e.g. exempt supplies or non-business use). The Czech Republic has implemented the gen- eral provisions of EU directives in respect of VAT refunds for entities registered for VAT pur- poses in other EU member states or non-EU businesses. VAT incurred in the Czech Republic is recoverable under the same conditions that apply to Czech VAT payers. The application for a VAT refund should be filed electronically in the state where the taxable person has a registered office or place of busi- ness. The application must be submitted by 30 September of the year following the year in which the VAT was incurred. Non-EU businesses can claim refunds of Czech VAT by submitting a written application to the tax authority for Prague 1. Refunds are only made on the basis of reciprocity (currently applicable only for Switzerland, Norway and Macedonia). Other notes Local reverse charge for selected transactions The reverse charge mechanism applies to sup- plies of gold, scrap materials and waste, con- struction and assembly works and emission rights effected between Czech VAT payers. As of 1 April 2015, the application of the re- verse-charge mechanism has been extended to cereal and technical crops, metals, mobile phones, integrated circuits, tablets, laptops, and videogame consoles. Furthermore, as of 1 September 2015, the mechanism has been ap- plied also to sugar beets. The mechanism shall be applied when the commodities are supplied between two domestic VAT payers and if the total tax base for all of the selected goods sup- plied exceeds CZK 100,000 (the limit is relevant only for goods subject to the local reverse- 73

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