As we have informed you, the amendment of the VAT Act effective as of 1 January 2013 has extended customer’s guarantees for unpaid VAT in the Czech Republic. Starting 1 April 2013 the bank accounts of VAT payers (which VAT payers has chosen for publishing) will be published by the Czech Financial Administration through the VAT payers register.
If the recipient (customer) pays for delivery of goods or services with the Czech VAT to a bank account of the supplier, which will not be published at the register, the recipient is automatically in the position of a guarantor for unpaid VAT by the supplier. In case of payment to the bank account, which is held out of the Czech Republic, the guarantee will be applicable without consideration whether the bank account is published or not.
According to the Information recently published by the General Tax Directorate the application of the above mentioned method of insurance is postponed by six months. According to this information tax authorities will not ask the tax guarantor for VAT underpayment till 30 September 2013. Financial administration wants to give taxpayers more time to prepare for this institute. Simultaneously tax authorities are still in process of verifying the information about the bank accounts and publishing them on the website (in the VAT payers register).
Information can be found here:
Further extension of the customer’s guarantee for VAT unpaid by the supplier was established in connection with so-called unreliable VAT payer. The payer, who significantly breaches its duties related to tax administration, will be marked and published through the VAT payers register by the Czech Financial Administration as unreliable payer.
If the customer purchases the goods or services with the Czech VAT from the supplier marked as unreliable payer as of the date of taxable supply, the customer will be in the position of a guarantor for unpaid VAT by the supplier. Based on the information of the Czech Financial Administration, the general public will be informed once the first unreliable payer is Publisher. Until then it is not necessary to check this.
Based on the above, we recommend setting-up control mechanisms, which will limit the risks that your company will get to the position of a guarantor. This can be achieved, for example, by adjustment of the contractual terms with the suppliers, setting-up control mechanisms related to the payments etc.
In this respect we offer our assistance with the adjustment of the contractual terms with the suppliers, setting up the control mechanisms related to the payments or control of the payments itself and consultancy in connection with the possibility to pay the VAT directly to the Tax authority..