Tax 

VAT News [September 2019]

What news is brought by the amendment to the VAT Act that will come into force in the spring of next year? Have you remembered to mark the important dates in your calendar to claim VAT refunds from other EU countries on time or to inform the tax authorities about the creation of a VAT group or changes in an existing group? And what is new at the Court of Justice of the EU? Read our VAT news and learn everything important.

Significant deadlines

Please note that applications for VAT refunds from other member states must be filed by no later than 30 September 2019, otherwise the refund claim will cease to exist.

Companies that are interested in creating a VAT group (or increasing/decreasing the number of VAT group members) should file the relevant application with the tax administrator by no later than 31 October 2019 to ensure that the planned steps may be taken as of 1 January 2020. Another opportunity for creating/revisiting VAT groups will come up again in a year’s time.

VAT Act Amendment – tax rates

The VAT Act amendment approved last week decreases the VAT rate from 1 April 2020 or 1 May 2020 (depending on its promulgation in the Collection of Laws) to 10% for catering services including serving draught beer, supply of e-books and audiobooks, water and sewer charges, hairdressing and barber services, repairs of bicycles, footwear, adjustments and repairs of clothing and textile products.

VAT Act Amendment – intracommunity trade with goods

A draft amendment to the VAT Act was presented to the Chamber of Deputies for the first reading and should significantly alter the conditions of cross-border trading with goods within the EU. Starting from January 2020, we should encounter, among other things, new conditions for the exemption of intracommunity supplies of goods, new rules for simplifying deliveries via a consignment warehouse and new procedures during the allocation of transportation in chain supplies of goods.

Substantive law conditions for the possibility of applying the exemption on intracommunity supplies of goods will newly include specifically the handover of the tax ID by the customer and the inclusion of intracommunity supplies in the EC sales list. The amendment will bring less scope for decisions about the allocation of transportation in chain supplies of goods and it will set a list of documents proving the actual performance of this transportation, which should be accepted by the tax authorities as a sufficient means of evidence. The functioning of the call-off stock simplification in the Czech Republic will be completely different from what businesses are currently used to, for example, VAT will not be self-assessed as of the time of relocation of goods to the consignment warehouse.

It is necessary to focus on the new rules as soon as possible and identify the impacts on your business, since the changes are relatively extensive. You will need to find adequate solutions for obtaining, verifying, circulating and archiving the newly required information so that your company is able to trade goods within the EU in 2020 without major burdens caused by the application of VAT.

CJEU case law

In case C-71/18 KPC Herning, the Court of Justice of the European Union (‘CJEU’) provided its comments on the sale of land with a property in a situation where the buyer intends to demolish the property and build another building on the land. In the view of the CJEU, this is not a transfer of construction land, which runs counter to the opinion that has long been presented by the General Financial Directorate.

The article is part of dReport – September 2019, Tax news; Grants and investment Incentives.

VAT Act Amendment CJEU VAT dReport newsletter
Tax 

The Supreme Administrative Court ruled on the moment on which an investment is initiated

The Supreme Administrative Court of the Czech Republic issued judgment No. 7 Afs 365/2018-62, which deals with the moment from which an entity is to capitalize the costs of acquisition into the value of the tangible and intangible assets. In terms of allocation of certain costs to the acquisition value of assets, the court held that it was not essential when the tax entity had formally approved the investment to be made but when it had objectively begun to invest even though it was not quite certain at that time that the investment would be completed successfully. 

22. 11. 2019
Tax 

What will 2020 bring in the area of VAT? Quick fixes already in January and a VAT decrease for selected supplies in May

One of the main topics of the traditional autumn seminar on value added tax, which is organised every year by Deloitte, were the new rules in the area of VAT, jointly referred to as “quick fixes”. Their primary purpose is to unify certain rules for cross-border transactions with goods within the European Union. What do they bring, specifically? How can preparations be made for them? 

22. 11. 2019