Indirect Taxes I 15 th March 2016 doc. JUDr. Radim Boháč, Ph.D. Department of Financial Law and Financial Science 36

Syllabus of presentation 1.Indirect Taxes 2.Value Added Tax 3.Subjects 4.Object 5.Base 6.Rate 7.Calculation 8.Tax period 9.Budgetary determination 10.Administration 2

1. Indirect Taxes 3 Indirect Taxes UniversalVATSelective Excise Taxes Energy Taxes

2. Value Added Tax Act no. 235/2004 Coll., on value added tax, as amended Council directive no. 2006/112/EC, on common system of value added tax essential elements of VAT – Subjects – Object – Base – Rate – Calculation – Period – Budgetary Determination administration of VAT 4

3. Subjects A.Taxable persons (osoby povinné k dani) B.Payors (plátci) – mandatory payors – voluntary payors Persons who paid the tax (consumers) 5

A. Taxable persons general definition – any person who independently carries out any economic activity – economic activity systematic on continuing basis specific definition – bodies governed by public law activities as public authorities 6

B. Payors voluntary payors – limit of turnover mandatory payors 7

B. Payors 8 0CZK1,000,000 mandatory payors taxable persons with seat in the Czech republic voluntary payors

B. Payors 9 March April May exceeding the limit 15 th April application of tax registration 1st May payor application of tax registration payor from the day following the day of notification of registration decision

4. Object A.Definition of object B.Basic terms C.Principles D.Example E.Tax point F.Tax documents G.Exemption 10

A. Definition of object 1.supply of goods, supply of services – consideration – taxable person – economic activity – place of taxable supply 2.acquisition of goods from other EU member state – consideration – taxable person or legal non-taxable person – economic activity – place of taxable supply 3.acquisition of new vehicles from other EU member state – consideration – non-taxable person 4.import of goods to Czech Republic 11

B. Basic terms taxable supplies output VAT input VAT (deduction of VAT) tax – output VAT > input VAT excessive tax deduction – input VAT > output VAT 12

Taxable supplies 13 Exempt supplies Taxable supplies Object of VAT

C. Principles 14 received taxable supply realized taxable supply input VAToutput VAT payor supplier custumer Tax Office price incl.VAT output VAT

D. Example1/4 15 Farmer A Producer B Tax Office CZK fruits 150 CZK

D. Example2/4 16 Producer B Retailer C Tax Office CZK jam 225 CZK Tax Office

D. Example3/4 17 Retailer C Consumers Tax Office CZK jam 300 CZK

D. Example4/4 18 Retailer C Tax Office Producer B Farmer A 150 CZK 225 CZK 300 CZK 225 CZK

C. Principles – reverse charge 19 received taxable supply realized taxable supply input VAT output VAT payor supplier custumer Tax Office price wth. VAT price incl.VAT output VAT

E. Tax point duty to issue tax documents types of tax documents – standard – simplified – special 20

F. Tax document chargeable event – supply of goods – transfer of real estate – supply of services – acquisition of goods from other EU member state receipt of the payment 21

Simplified tax document 22 business name VAT identification number number of tax document scope and object of taxable transaction date of the chargeable event rate of VAT total amount including VAT

G. VAT Exemptions 23 VAT exemptions i. with entitlement to VAT deduction ii. without entitlement to VAT deduction

i. With entitlement to VAT deduction 24 received taxable supply realized supply input VAT payor supplier custumer Tax Office price incl.VAT price w/o VAT output VAT

i. With entitlement to VAT deduction examples: – supply of goods to other EU member state – export of goods to third countries – supply of services to third countries 25

ii. W/o entitlement to VAT deduction 26 received taxable supply realized supply payor supplier custumer Tax Office price incl.VAT price w/o VAT output VAT

ii. W/o entitlement to VAT deduction examples: – insurance and reinsurance transactions – betting, lotteries and other forms of gambling – hospital and medical care – the activities, other than those of a commercial nature, carried out by public radio and television bodies – financial transactions (the granting of credits, deposit and current acounts …) 27

5. Base 28 Received Amount (CZK 121) Tax Base (CZK 100) VAT (CZK 21)

6. Rate 29 Rates of VAT basic (21 %) first reduced (15 %) second reduced (10 %)

Rates of VAT

7. Calculation 2 methods – calculation (payment without VAT) tax = tax base x tax rate – calculation (payment with VAT) tax = consideration x coefficient coefficient = 21/121, 15/115, 10/110 31

8. Period calendar month calendar quarter – conditions 32

9. Budgetary determination shared tax public budgets – state budget (70,25 %) – municipality budgets (20,83 %) – regions budgets (8,92 %) 33

10. Administration administrator of VAT (správce daně) – financial offices (Organs of Financial Administration) – customs offices (Organs of Customs Administration) tax return control statement 34

10. Administration due date – tax – excessive tax deduction quarantee – for unpaid tax – guarantors = recipients of taxable supply – conditions 35

web: tel.: th March 2016 doc. JUDr. Radim Boháč, Ph.D. Department of Financial Law and Financial Science 36