Activities of the tax administration

The Ministry of Finance has published the first draft of the amendment to the Act on Registration of Sales and on the Amendment of Certain Other Acts, which will also affect the VAT Act. This amendment increases the limits for the correction of the tax base for bad debts from the creditor’s point of view in the case of so-called minor receivables and allows for the correction to be made earlier than according to the currently valid regulation. In the case of correction of the debtor’s tax deduction, the amendment reduces the 6-month deadline by half. It also extends the reduced rate to the serving of all beverages (except alcoholic beverages) as part of the catering service. The amendment should be effective from 1 January 2027.

The Ministry of Finance has also submitted another amendment to the VAT Act for comment, which should transpose part of the VAT rules for the digital age (ViDA) under Council Directive 2025/516 of 11 March 2025. With this amendment, some changes related to one-stop-shop performance should come into effect as early as 1 January 2027. The amendments abolishing the intra-EU storage regime and related provisions should take effect from 1 July 2028.

CJEU case law

• In Joined Cases C-409/24 J-GmbH to C 411/24 D GmbH & Co. KG, the Court  ruled on the possibility for Member States to tax at different rates of VAT a single supply consisting of a principal supply and an ancillary supply in the form of accommodation, including breakfast and other services. The Court concluded that Member States have the option of applying a reduced rate of VAT to the supply of accommodation and may also, in the context of such services, limit the application of a reduced rate of VAT to ‘specific and specific aspects of the categories of such services’, while at the same time complying with the principle of fiscal neutrality. In our opinion, this is not a key decision for common practice in the Czech Republic.
• In Case C-436/24 Lyko Operations , the CJEU dealt with the situation of a customer loyalty points program, where a customer can receive additional goods for points as part of a subsequent purchase. It assessed this situation in the context of the rules on vouchers and concluded that the points in Lyko’s program are not vouchers, because according to the CJEU, the points are not associated with any obligation on the part of Lyko to accept them in consideration for the supply of goods. These points only entitle their holder, if they decide to make a new purchase at Lyko, to receive additional goods as a bonus. Such a conclusion may significantly shape the current approach to the rules on vouchers from a VAT perspective.
• In Case C472/24 Žaidimų valiuta , the Court assessed the VAT regime for a virtual currency with which it is possible to purchase various benefits in the context of a computer game. The Court of Justice ruled that the VAT exemption does not apply because virtual currency is accepted only within the game and, moreover, does not belong to players. According to the CJEU, virtual currency does not even constitute a voucher, because it is not associated with the obligation to accept it as consideration for services. In the end, the CJEU concluded that it is an electronic service and the tax base is the entire consideration received for the sale of the virtual currency. This conclusion may have implications for the approach used in practice.
• Furthermore, a decision was issued in Case T-575/24 Digipolis, in which the CJEU was asked about the VAT regime for the services of an association established by municipalities on the basis of Belgian legislation, which allows the delegation of public law powers by municipalities to associations established by them. According to the CJEU, this is a provision of a service for consideration, where the legal relationship resulted from the statutes, which had to be in accordance with public legislation. Furthermore, the CJEU ruled that the association provided services within the framework of economic activity, which was indicated by the regularity of the provision of the service. According to the CJEU, the association carried out economic activity independently, was a sufficiently independent legal entity and rather did not act as a public authority. We believe that the case should not have a significant impact on practice in the Czech Republic.
• In situation T638/24, the Finanzamt Österreich assessed the taxation of the acquisition of goods before the application of the quick fixes rules and the incorrectly stated VAT on the invoice by the supplier. The CJEU stated that the acquisition of goods is considered to have taken place in the state whose VAT number the purchaser used, unless he proves that it was subject to tax in the state of termination of the transport. It also added that there may be a situation where both the obligation to pay the incorrectly stated VAT on the invoice by the supplier and the obligation to tax the acquisition of goods by the recipient of the supply arises, while the recipient of the supply cannot claim a deduction of either of the two amounts. In this situation, the principle of neutrality or proportionality is not violated either, since Austrian legislation allows invoices with incorrect VAT to be corrected.  With regard to the assessment of the situation before quick fixes, we are of the opinion that the impact of this decision on practice is quite limited.
• In his Opinion in Case T-184/25 Veronsaajien oikeudenvalvontayksikkö, the Advocate General of the Court of Justice of the EU considered the issue of the exemption of the administration of loans by the person who grants or has granted them. In this case, company A granted the loan, subsequently transferred all the rights and obligations under the loan agreement to company B, but company A continued to manage the loan for company B. The Advocate General noted that the legislature’s intention was to tax the outsourcing of credit servicing by a third party, and therefore company A had to tax its credit servicing services.