Activities of the Tax Administration ‎

• The amendment to the VAT Act, which modifies the rules for determining the date of taxable supply ‎for long-term supplies provided through public-private partnership (PPP) projects, has been signed ‎by the president and published in the Collection of Laws. This change clarifies the moment of tax ‎liability for specific types of supplies only concerning PPP projects that take place over a longer ‎period.‎
• The Coordination Committee between the General Financial Directorate (GFD) and the Chamber of ‎Tax Advisors of the Czech Republic discussed and closed contributions concerning: 1) the issuance ‎of tax documents (self-billing) in connection with the VAT Act amendment effective from January 1, ‎‎2025, 2) possible taxation of compensation for stolen goods from the VAT perspective, and 3) the ‎question of the VAT rate for the delivery of an unfinished unit intended for social housing. Regarding ‎the self-billing contribution closed with a dispute, the GFD stated that the VAT Act amendment does ‎not change the responsibility of the provider for the accuracy of tax documents or the determination ‎of the person liable to declare tax. This stance is considered controversial and sparked professional ‎debates. In the case of compensation for thefts, the GFD admitted that if compensation is provided ‎for stolen goods, it might be subject to VAT—which may represent a shift in practice. In the area of ‎social housing, it was confirmed that the delivery of an unfinished social housing unit is subject to a ‎reduced rate.‎

Judgements of the CJEU

• In the CJEU decision in case C-615/23 P.S.A., the Court of Justice of the EU addressed whether ‎subsidies paid in the public interest to a private carrier are subject to VAT. A municipality contracts a ‎carrier to operate public transport, sets the fare that does not cover costs, and the subsidy serves to ‎partially compensate for losses. The CJEU assumed that the recipients of the transport service are ‎public transport passengers, not the municipality. The CJEU ruled that these subsidies are not ‎subject to VAT because they are not specifically paid to the carrier for certain recipients, do not ‎affect the fare price for passengers, depend on the number of vehicle kilometers, not service usage, ‎and are paid additionally. Furthermore, the subsidy does not affect the taxable amount because the ‎services are intended for all potential passengers and its calculation does not consider the identity ‎or number of users. This decision may have a significant impact on existing interpretations of subsidy ‎taxation rules.‎
• In the opinion on case C-101/24 XYRALITY GmbH, the Advocate General of the Court of Justice of ‎the EU assessed the determination of the place of supply for electronically provided services before ‎‎2015 and the obligation to pay tax. XYRALITY sold mobile applications via a third-party platform from ‎‎2012–2014. Apps were free to download, with a paid upgrade from the platform operator. The ‎Advocate General stated that the operator acted in its name on behalf of XYRALITY, therefore the ‎place of supply is where the platform is based. XYRALITY is not obliged to pay VAT, and the given ‎purchase confirmation is not considered an invoice according to the directive, which exempts ‎XYRALITY from the obligation to pay tax stated in these confirmations. Such an opinion—if adopted ‎by the CJEU—could influence the application of VAT rules for commission structures.‎
• In the opinion on case C-744/23 Zlakov, the Advocate General of the CJEU assessed the taxability of ‎legal services provided pro bono by a lawyer, but with the possibility of future payment (as the ‎Bulgarian law may require the unsuccessful party in a dispute to pay a tariff fee of 400 BGN to the ‎lawyer), which raised a dispute over the taxability of this activity. The Advocate General favored the ‎obligation to pay VAT on the received fee regardless of its compulsory payment by law and that its ‎payment was not certain during the service provision.‎