VAT relief for gratuitous medical supplies

Pursuant to a March decision of the Minister of Finance, VAT payers have been released from the VAT duty in respect of gratuitous supplies of selected medical products that have been (or will be) realised during the state of emergency. The Minister of Finance proceeded in line with Section 260 of the Tax Code, applying the tax relief to a broad array of products that, however, have one thing in common: they are necessary for medical needs in relation to combating the coronavirus spread (such as facemasks, gloves, diagnostic test kits, ventilators, etc.). Although we consider the legal regulation of the respective VAT relief rather insufficient, we believe that a failure to pay VAT on the above-specified supplies will be unconditionally tolerated in practice.

In mid-April, the Minister of Finance extended the VAT relief to include any gratuitous supply to selected entities, such as healthcare providers, the fire brigade, Police of the Czech Republic, Armed Forces of the Czech Republic, social service facilities, etc. In this respect, the Minister of Finance once again selected rather questionable VAT relief under Section 260 of the Tax Code.

Information of the General Financial Directorate (GFD)

The GFD published a comprehensive overview of applying duty free treatment, or also VAT exemption if relevant, to imports of goods from third countries. In most situations, this has to involve charitable gratuitous imports; nevertheless, imports in return for payment may also qualify provided that certain conditions have been met.

C-231/19 Blackrock

The Advocate General of the Court of Justice of the EU (CJEU) described the aspects of rules for exempting collective investment funds management services. The Advocate General also examined whether the exemption may also apply to situations where the respective services are simultaneously used for other purposes (management of other funds). He concluded that in such a case, the management services should be fully taxed.