Value Added Tax (VAT) 21st March 2017 doc. JUDr. Radim Boháč, Ph.D. Department of Financial Law and Financial Science

Syllabus of presentation Indirect Taxes Value Added Tax Subjects Object Base Rate Calculation Tax period Budgetary determination Administration

Indirect Taxes 1. Indirect Taxes Universal VAT Selective 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

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

A. Taxable persons general definition specific 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

B. Payors voluntary payors limit of turnover mandatory payors

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

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

4. Object Definition of object Basic terms Principles Example Tax point Tax documents Exemption

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

B. Basic terms taxable transactions output VAT input VAT (deduction of VAT) tax output VAT > input VAT excessive tax deduction input VAT > output VAT

Taxable supplies Object of VAT Taxable transactions Exempt transactions Taxable transactions

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

D. Example 1/4 Farmer A Producer B Tax Office 1.150 CZK fruits 150 CZK

D. Example 2/4 Retailer C Producer B Tax Office Tax Office 1.725 CZK jam 225 CZK 225 CZK Tax Office Tax Office

D. Example 3/4 2 300 CZK Retailer C Consumers jam 300 CZK Tax Office

D. Example 4/4 Farmer A Producer B Retailer C Tax Office 300 CZK

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

E. Tax point chargeable event receipt of the payment supply of goods transfer of real estate supply of services acquisition of goods from other EU member state receipt of the payment

F. Tax document duty to issue tax documents types of tax documents standard simplified special

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

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

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

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

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

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 …)

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

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

Rates of VAT 2007-2016

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

8. Period calendar month calendar quarter conditions

9. Budgetary determination shared tax public budgets state budget municipality budgets regions budgets

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

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

e-mail: bohac@prf.cuni.cz web: www.radimbohac.cz tel.: +420221005530 21st March 2017 doc. JUDr. Radim Boháč, Ph.D. Department of Financial Law and Financial Science