Czech Republic: Updates on VAT “quick fixes” and VAT on fuel cards

12 February 2020

Updates concerning value added tax (VAT) in the Czech Republic include the status of the VAT “quick fixes” regime and implementation of rules for VAT on fuel cards.

Update on “quick fixes”

The EU Council in December 2018 adopted the “VAT quick fixes” that are intended to simplify international trade and to be implemented by the EU Member States by 1 January 2020. The VAT quick fixes concern the following four items:

  • Simplified treatment for call-off stock
  • Uniform rules to simplify chain transactions
  • Mandatory VAT identification number to apply the exemption for intra-Community supplies
  • Simplified proof for intra-Community supplies

The Czech amendments to the VAT law implementing the EU “quick fixes” regime are pending its second reading in the Chamber of Deputies. At the end of January 2020, the General Financial Directorate (GFD) disclosed information confirming the option of invoking the EU directive’s direct effect. This means that beginning 1 January 2020, Czech entities may proceed in accordance with the amended EU rules—even if they have not yet been transposed into Czech law.

 In its information disclosure, the GFD noted that if the option of applying the direct effect of the amended directive is exercised, all other related conditions must also be fulfilled. This would concern deliveries of goods from the Czech Republic to another EU Member State by means of call-off stock arrangements. Individual flows of goods (such as the transfer of goods to a call-off warehouse and its subsequent domestic sale) would need to be correctly declared in the “EC sales lists” (now containing a new separate sheet specifically designed for this purpose).

According to the GFD’s information disclosure, an updated electronic EC sales list form is to be made available on the tax portal——no later than 20 February 2020.

The application of the directive is voluntary, meaning that it may also be possible to proceed in accordance with the VAT law currently in effect.

Read a February 2020 report prepared by the KPMG member firm in the Czech Republic

VAT on fuel cards

Fuel card transactions occur across the EU, and certain new measures being implemented by some EU Member States may present challenges.

Most EU Member States have been reluctant to apply the judgment of the Court of Justice of the European Union (CJEU) in the Vega International (C235/18) and Auto Lease Holland (C185/01) cases.

In the Czech Republic, the General Financial Directorate (GFD) is preparing to announce its position in an information disclosure on the application of VAT on fuel cards, and how to implement the CJEU judgments into Czech administrative practice. The GFD has submitted its position to the professional public for comments. Tax professionals believe that the proposed effective date of 1 April 2020 may not be realistic.

Read a February 2020 report prepared by the KPMG member firm in the Czech Republic

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