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Czech Republic: VAT changes from 2013

Unreliable VAT payers. As a new way of fighting tax evasion, the amendment introduces the concept of a so called “unreliable VAT payer”. Unreliable VAT payers will be considered those who do not comply with their VAT obligations. The database of unreliable VAT payers should be publicly accessible. In this respect, the amendment also extends the liability of the recipient of the supply for any VAT unpaid by the supplier to those cases, where the supplier is known to be an unreliable VAT payer.

Reverse charge in construction. In connection with difficulties in determining which construction work is subject to reverse charge and which is not, the amendment introduces a fiction for cases where both supplier and recipient acting in mutual agreement apply the reverse charge. In such a case, the tax authority will not question the legitimacy of the application of the reverse charge mechanism.

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