The Czech Tax Administration published an overview of most changes introduced by an amendment to the VAT Act. Case C-201/18 Mydibel assessing sale and lease back transactions in terms of VAT may have significant impacts on the lease market in the Czech Republic. In case C-275/18 Milan Vinš, the Court of Justice of the European Union (CJEU) assessed a potential exemption from VAT in the exports of goods. More information is available in the article.
“April” amendment to the VAT Act
In relation to an amendment to the VAT Act effective (with certain exceptions) since 1 April 2019, the Czech Tax Administration (“TA”) published on its website a detailed overview of the majority of relevant changes. Furthermore, the TA drew attention to the fact that the amended VAT Act also updated selected names and descriptions of the items in the form as well as instructions for completing the VAT return (the content and structure of the VAT return remain unaffected). The TA also emphasised that the xml structure of the Local Sales/Purchases Report was going to be updated as well (however, the existing xml structure of the Local Sales/Purchases Report is to be unchanged until 30 September 2019).
Information as to the treatment of vouchers in line with the updated VAT rules is anticipated to be published by the TA in the near future.
Judicature of the Court of Justice of the EU (CJEU)
Case C-201/18 Mydibel assessing sale and lease back transactions in terms of VAT, may have significant impacts on the lease market in the Czech Republic. The CJEU concluded that in general terms, such transactions solely constitute financing rather than a supply of goods and their leaseback to the supplier. At first sight, the case at hand could also affect other lease financing structures; nevertheless, we believe that its effect is relatively limited.
In case C-275/18 Milan Vinš, the CJEU assessed a potential exemption from VAT in the exports of goods. Apparently, not all conditions in Section 66 of the Czech VAT Act applicable to the supply of goods for exports exempt from VAT are in line with the EU’s VAT Directive. The CJEU opines that a failure to comply with the formal requirement for placing goods under the “Exports” customs procedure cannot result in the exporter forfeiting the right to the VAT exemption applicable to exports. It will be sufficient to prove that the goods in question have actually exited the territory of the European Union.
The article is part of dReport – April 2019, Tax news; Grants and investment Incentives.