What changes in VAT from April 2017?
ANNOUNCEMENT: On Tuesday, April 4, 2017 Members of Parliament rejected the Senate amendments and re-approved the government’s “tax package”. The law now goes to the President for signature and will enter into force 15 days after its publication in the Collection of Laws.
The amendment, which is on the programme of the Senate of the Czech Republic, does not only conclude the tax income changes, but also concludes the changes in the area of VAT. If the amendment is confirmed by the Senate, the changes will be valid from the 1st of April, 2017.
- Cancellation of specific adjustments by a company (previously an association) – every partner of a company will have the same rights as any other taxpayer. The General Financial Directory (GFD) is preparing some information on this change. However, existing companies can follow the current rules until the end of 2018.
- Services related to real estate – they will be not listed in the Law. There will just be a reference to the EU-council No. 282/2011 order in article 31a, which cases are considered to be services related to real estate.
- Contribution of a non-cash deposit – the supply of goods or providing services will be considered a contribution of a non-cash deposit to other subjects, not only business corporations. For example, associations, foundations, trust funds, etc. The condition is still the same – the depositor has claimed the deduction through the acquisition.
- Removal of business assets – the goods will be considered to be removed at the time when any of the conditions for which the initial transfer of assets across the border is not relocate. For example, a machine rented from the Czech Republic to Germany will be shown as removed at the same time that the machine will be sold in Germany instead of it being returned to the Czech Republic.
- Acquisition of goods – it is not only the purchase from the state of the seller, but it will be, for example, any acquisition in case a German company sells a machine to the Czech Republic, which the Czech buyer subsequently moves to Poland.
- Developing the obligation to admit the tax by vouchers – unless the purchase of the vouchers clearly determines the goods to be delivered or the services to be provided, then there is no obligation to declare the tax from the payment. The tax rate and place (state) of fulfilment shall be determined at the time of redeeming the voucher in the subsequent purchase. The GFD will issue some information on this in the coming days.
- Export of the goods –Exporters in the EU member states will no longer be required to confirm the exit of the goods within the EU. The reason is that the customs offices of member states are not obliged to confirm the export of goods via the document. The day of the provision of the supply will be considered as the day the goods will be exported out of the EU.
- Conditions of claiming the entitlement of deduction – in the case of shortening the coefficient of 95 %, the claim from the shortened fulfilment will be claimed in the regular tax return in the subsequent 3 years without the necessity of an additional tax return to the year the deduction arose. The reason is that the coefficient of 95 % and more is rounded to 100 %.
- Correction of a deduction – the taxpayer, who was paid an advance, will be obliged to make a correction to the deduction, if he claimed the deduction from the provided advance and this advance was not returned and the fulfilment does not happen. At the time of the return of the advance, the taxpayer, who returns the money, gets the tax back, which was originally taxed.
- Settlement of a deduction – in case of the destruction, loss or theft of an asset, which will be not be properly proven, the taxpayer will have to make a settlement of the deduction within a 3 year period – and return the claimed deduction from this asset.
- Adjustment of a deduction – in case of the one-time adjustment of a deduction from a long-term asset due to the sale of the asset, an adjustment will be made in the taxable period the asset was sold. Not like in the case of the tax return, which is in the last period (December or the fourth quarter) of the calendar year.
- Expansion of the reverse charge – the next set of fulfilments are near, which will be under this regime in case of provisions to the taxpayer. The intermediary service in question is according to the § 95/2, delivery by selling real estate (immovable property) by a debtor from a judgment in a compulsory sale procedure, providing staff for construction or installation work and delivering a taxable fulfilment to a taxpayer, if it is delivering the goods provided like a guarantee by the realisation of this guarantee or by delivering the goods for rendering the ownership to the acquirer.
- Unreliable person – it is for example a unreliable taxpayer, whose registration was cancelled and the time they stopped being a taxpayer. The unreliable person becomes a non-taxpayer, but this is in serious breach of the obligations related to the tax.
More posts from Petr Vondraš