Amendment to Value Added Tax Act
At the last moment on 22 December 2014, the Chamber of Deputies approved the version of the amendment that had been returned by the Senate for further debate, which means that:
-
keeping the turnover limit decisive for mandatory registration in the amount of CZK 1 million within 12 consecutive months (the proposal reduced it to CZK 750,000);
-
general rules for determinating tax rates regarding transfer of real estate will be changed according to the original proposal and in accordance with the new Civil Code and the related laws (for example, calculation of the floor space of a flat will be determined in accordance with the governmental decree and will include partition walls);
-
the definition of building land ("stavební pozemek" in Czech) and rules for the application of VAT during a sale of land will be the same in the 2015 as this year, and the new definition of building land will take effect in 2016;
-
the "inspection report" ("kontrolní hlášení" in Czech, i.e. a copy of all documents included in a tax return) introduced from 2016 will always be submitted by individuals with the tax return (according to the original version, even quarterly payers would have had to submit it every month). Legal entities have to prepare the inspection reports monthly no matter what their tax period is;
-
the amendment introduces transferred tax liability for some kinds of products (for example, mobile phones, tablets, some agricultural commodities). With respect to the date of approving the amendment, the government will not prepare the implementing instructions in time, so it is likely that the system with transferred tax liability will be take effect after 1 April 2015.
The amendment must be signed by the president and published in the Collection of Laws, which is usually just a formality. It is expected that the above described changes will take effect on 1 January 2015.
