Hereby we would like to inform you about changes in the tax area effective from January 1st, 2010. Please see below more information:
Amendment to VAT Act – changes from 1.1.2010
In accordance with the amendment to the VAT Act (No. 362/2009) will be increased both VAT rates in the Czech Republic – this resolution is effective from January 1st, 2010. The basic rate is increased from original 19% to 20%, whilst the reduced rate from original 9% to 10%. In connection with this change we would like to remark that the current rates will be applied for the tax duties till the end of the year 2009, incl. the entitlement to tax deduction, credit notes, debit notes or corrective tax documents.
The temporary regulations of the approved amendment describe the regime of deposits received before the end of the year 2009 for taxable supplies effected after January 1st, 2010. According to these regulations a taxpayer with the tax liability applicable for the payments received before the date of taxable supply (till December 31st, 2009 at the latest) will apply by billing of these payments received on the date of taxable supply after January 1st, 2010 the VAT rate valid when received the payment.
There is a different interpretation of this regulation (in accordance with the referred payment). Therefore we expect the explanation of the temporary regulation will be specified by the Ministry of Finance of the Czech Republic.
Regarding the finance lease with the surrender right of lease subject the temporary regulations determinate:
- if the finance lease agreement was concluded and also the subject of lease was handed over to renter before December 31st, 2008, will be for the lease instalments applied the being VAT rates, thus 9% and 19%
- but if the finance lease agreement with the surrender right of lease subject was concluded after December 31st, 2008, will be for the particular instalments with the date of taxable supply after January 1st, 2010 applied the new VAT rates (10% and 20%)
In case of any questions regarding this topic please do not hesitate to contact us.