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The electronic evidence of invoices (EET) is one of the most discussed issues in the Czech Republic at this time. It has become the pre-election topic of regional elections, similarly to healthcare fees or church restitution in the past. The fact that the regions do not even have a say about this topic cannot be changed…
The Ministry of Finance has not answered the businessman’s application to postpone the EET launch by at least one month and to make it easier for the pre-Christmas stall keepers. The EET will be launched from the 1st of December, 2016.
From the 29th of July, the relatively small VAT amendment is valid, where I would like to draw your attention to reduction in the fines related to the control report. If you only submit the control report late once during the calendar year, you do not have to pay the fine. It will be possible to apply for a waiver from the fine, whereas the tax administrator can waive a part or the whole fine, if the reason for non-submission could be justified taking the circumstances into account.
We have to submit the control report once a year. Most tax payers have already become used to it and have taken it as a necessary evil. Creating the control report has not been easy from the beginning, but our experience with it has told us that most of the software programmes are able to create the control report over the last half a year. Thanks to the Tax administrator’s reaction, we know that the most frequent problems are minor mistakes like the wrong number of documents, the wrong Tax Identifikation Number, etc. The exclusion of errors was not the main target of the launch of control report.
The time to evaluate the control report is almost upon us. It should be financial at first. The Ministry of Finance uses a sum of 80 billion CZK for the estimation of tax evasion. There is a question: How useful will the implementation of control report be, according to the State budget? According to the development of the State budget there is, how the Ministry of Finance informs us about, no utility. The year-to-year growth of income from VAT to the 30th of June 2016 was 4.6 billion CZK, which means the annual growth of income from VAT is 4,4 % more than last year for the same period. This growth is extremely influenced by the growth of the whole Czech economy and especially from household consumption.
We have expected an extreme reduction of excessive VAT deductions in the form of POP (process to exclusion of this impeachment) on the control report. On the basis of my experience, I can confirm it has not happened, rather the opposite. The Finance Administration that observes a trend, which officially declares – its activity will be mainly be the VAT return.
The two next areas, where the Finance Administration is really active, are the areas of transfer pricing and a deductible entry for development and research. According to the EU and to the European meaning, I do not expect the approach of the state will be more benevolent to the tax subjects.