Tax 

VAT News [November 2019]

The VAT Act amendment will not be passed by the end of 2019. The General Financial Directorate informed about the new VAT rounding rules. And the Court of Justice of the European Union ruled that member states have the authority to selectively define, which sport services and the performance closely related to them can be exempt from VAT without a right to claim VAT deduction. You can find more information in the latest VAT News.

VAT Act Amendment

The VAT Act amendment, which should become effective on 1 January 2020, will definitely not be passed and published in the Collection of Laws by the end of 2019. That is because the Chamber of Deputies will discuss the amendment for the first time at the end of November 2019 at the earliest, even though the amendment was supposed to implement the EU Directive on new rules for the intra-Community trade of goods. However, we believe that the absence of new rules should not cause any trouble; VAT payers can use the direct effect of the EU Directive.

VAT Rounding – the General Financial Directorate Informs

In advice issued in the middle of October, the General Financial Directorate informed about the new VAT rounding rules applicable from 1 October 2019.  In the case of VAT rounding for wire transactions, the GFD interpretation was quite surprising, as it contradicted the wording of the VAT Act. However, it cannot be expected in practice that the GFD interpretation would not be accepted.

No Change to VAT Payer Registration Limit in Sight

The European Commission, which has an interest in unifying the system rules for taxable persons not yet registered for VAT purposes, has not yet reached an agreement about the limit that should be set for a compulsory registration for VAT purposes. Moreover, the effect of the potential change was postponed to 2025, and therefore we cannot expect any changes to this topic in the next few years.

CJEU’s judgments

The opinion of the Advocate-General of the Court of Justice of the European Union in Case C‑488/18 Golfclub Schloss Igling implies that member states have the authority to selectively define, which sport services and the performance closely related to them can be exempt from VAT without a right to claim VAT deduction. As of now, the Czech VAT Act contains only one criteria for the exemption – the requirement of the non-profit nature of the provider.

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