Investor Presentaiton
charge mechanism from 2015). According to
a proposed amendment, the reverse-charge
regime could be applied also to supplies below
CZK 100,000 provided that the contracting par-
ties agree on this treatment in writing.
Further changes related to the local reverse
charge mechanism came into effect in 2016.
The local reverse charge mechanism now ap-
plies to supplies of immovable property, unless
they are exempt. As of February 2016, the local
reverse charge mechanism should also apply
to supplies of gas and electricity to adealer and
to supplies of electricity certificates.
Local supplies of goods effected by a person
not established in the Czech Republic
According to a proposed amendment, as of
May 2016 the reverse charge mechanism
should also apply to local supplies of goods ef-
fected by a person not established in the Czech
Republic to a Czech VAT payer unless the sup-
plier is already registered as aCzech VAT payer.
Bad debt relief
A VAT payer is allowed to claim a VAT refund
for uncollectible receivables (bad debts). AVAT
refund should be possible for certain receiv-
ables after maturity, where the debtor is under
bankruptcy proceedings.
Liability for payment of VAT
As the recipient of a taxable supply a Czech
VAT payer can be liable for VAT from the
received supply if it has not been paid by the
supplier.
The tax authority may demand VAT payment if:
― a supplier intentionally failed to
pay VAT and the customer knew or
should have known of this fact;
the price for the received taxable
supply is clearly and unjustifiably
different from an arm's length price;
― consideration for a taxable supply
is remitted to a foreign account;
―the supplier has been identified by the tax
authority as an unreliable VAT payer;
- the payment is made to a bank
account which is not published in the
tax authority's register (liability is
only applied if the payment exceeds
CZK 540,000, including VAT);
fuel is supplied by a fuel distributor not
published as a registered distributor of
fuel at the moment of taxable supply.
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