Czech Republic: Ownership of goods for VAT purposes (Supreme Administrative Court decision)

A court decision concerning ownership of goods for VAT purposes

A court decision concerning ownership of goods for VAT purposes

The Supreme Administrative Court held that a taxpayer was not the owner of goods for value added tax (VAT) purposes and thus was not entitled to deduct VAT with respect to such goods.  


The taxpayer purchased goods from a supplier who kept the goods in a warehouse under the supplier’s control and resold the goods based on a power of attorney issued by the taxpayer, who subsequently received monthly reports on purchases and resales from the supplier.

The court denied the taxpayer’s claim to VAT deduction because ethe taxpayer had not acquired the right to dispose of the goods as their owner. The court emphasized that it is necessary that the owner can make decisions influencing the legal position of the goods. If the owner does so through an agent, it is still necessary to prove that the owner can at least generally influence the agent’s acts. A pre-condition is the owner knowing what the relevant goods are, having a real possibility to give instructions concerning the goods to the agent, and responding when the agent oversteps their powers.

Read a March 2023 report prepared by the KPMG member firm in the Czech Republic


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