Czech Republic: VAT developments
Reports about developments relating to value added tax (VAT)
Reports about developments relating to value added tax (VAT)
The KPMG member firm in the Czech Republic prepared reports about the following developments relating to value added tax (VAT) (read more at the hyperlinks provided below):
- Clarifications regarding changes to VAT Act for real estate: The Coordination Committee of the General Financial Directorate and the Chamber of Tax Advisors of the Czech Republic clarified certain changes to the VAT Act in connection with new construction regulations. The changes will be effective from 1 January 2024 and concern the construction industry and the supply and lease of real property. Read an August 2023 report
- Right to deduct input VAT for advertising services: The Supreme Administrative Court held (judgment 8 Afs 111/2022–36) that a taxpayer was entitled to claim input VAT with respect to advertising services that were to be rendered within motorcycle races, among other things by placement on the jersey of a racer who due to injury had only been racing for three months out of the year, because the taxpayer continued to receive the advertising services although not directly on the track during races. Read an August 2023 report
- Government draft consolidation package creates double VAT for car leases: The government's draft consolidation package limits the right to deduct VAT for passenger vehicles in category M1 with a purchase price of over CZK 2 million, with no exception for taxpayers who provide cars under finance lease arrangements, which would result in double taxation from a VAT perspective (i.e., application of VAT on both leasing companies and their customers). The chamber of deputies has approved the government's draft consolidation package in the first reading. The second reading likely will be on the agenda at the beginning of September when possible amendments will be debated. Read an August 2023 report
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