VAT News: June

Judicature of the Court of Justice of the EU (CJEU)
The judgment in case C-81/17 Zabrus demonstrates that tax administrators must not reject a claim for a VAT deduction applied as part of additional tax returns if all substantive criteria for its application are met. This gives rise to the question whether tax payers may retrospectively elect the taxation periods for which VAT deductions will be claimed.

The Advocate-General of the CJEU in his opinion on case C-249/17 – Ryanair provided a new point of view as regards the possibility of applying a VAT deduction from the purchase and holding of business shares where the respective subsidiary is not provided with any taxable supplies. The Advocate-General opines that it is still possible to apply the tax deduction under certain circumstances, which is contrary to previous judgments of the CJEU to a certain extent. It is uncertain whether his opinion will also be adopted by the CJEU.

Amendment to the VAT
An amendment to the VAT Act with the proposed effectiveness from January 2019 has been referred to the Government of the Czech Republic for consideration. Another critical change was added to the amendment, concerning the taxation of supplies of goods including assembly by a person established in a country other than the Czech Republic. If both the supplier and the customer are VAT payers, the supplier will have to invoice the supply including Czech VAT (the supply would be subject to self-assessment by the customer through the end of 2018).

The article is part of dReport – June 2018, Tax news; Grants and investment Incentives