Interesting information released by the General Financial Directorate

Information about the risks of guaranteeing for VAT

The GFD released updated information about the guarantee mechanism for VAT which contains legal changes, including changes reflecting the amendment effective from 1 July 2017 (more infornation here, in Czech only).

Another piece of information was released defining the conditions under which a subject becomes an unreliable entity; this happens either by law or because of the tax administrator's decision. The mechanism of an unreliable person should have an impact on VAT non-payers who seriously breach their obligations and thus jeopardise the proper administration and collection of taxes (more information here, in Czech only).

The GFD released information with respect to discovered VAT frauds related to the provision of labour force. The information contains, among others, a list of some real-life facts which the tax entities should take into account when investigating their business partners (not only concerning the provision of labour force) to prevent being considered as VAT guarantors because they could or should have known that the providers do not plan to pay VAT (more information here, in Czech only).

Information about a research and development project

The General Financial Directorate released information which specifies the requirements necessary for the preparation and processing of a research and development project whose existence is an essential condition for claiming a deduction from the income tax base (more information here, in Czech only).

Information about the application of VAT regarding members of an association

The amendment of the VAT Act effective from 1 July 2017 revoked the special treatment of the application of VAT regarding the activities of members of an association. Thus, the GFD released information which summarises the impact of revocation on the application of VAT in real-life cases (more information here, in Czech only).