What impact do the new tax measures have on VAT payers' obligations?
VAT payers, who have monthly obligations, may no longer be oriented in the flood of newly adopted tax measures to help taxpayers to overcome the current situation caused by the spread of the coronavirus. For this reason, we provide a brief overview of the tax measures specifically related to VAT and add some important remarks that should be kept in mind.
Measures taken related to VAT
Under the “first liberalization package”, the Ministry of Finance has allowed for the possibility of waiving the late filing fine for VAT returns. However, unlike income taxes, each taxpayer must apply individually for this waiver and prove that the reasons for the delay were due to the spread of the coronavirus.
The Ministry also decided to automatically waive for each VAT payer the late filing fine for the control statement in the amount of CZK 1,000 incurred in the period from 1 March 2020 to 31 July 2020. Other late filing fines for the control statement (in the amount of CZK 10,000, CZK 30,000 and CZK 50,000) will be waived only upon an individual request, and the taxpayer will have to prove the reasons for the late submission were due to the spread of the coronavirus.
If the late filing fine for a control statement of CZK 10,000, CZK 30,000 and CZK 50,000 will be waived upon an individual request due to the spread of the coronavirus, the taxpayer will automatically be exempted from the late filing fine for VAT return as well. However, the taxpayer must submit the VAT return no later than on the day when the delayed control statement is submitted. This measure is part of the so-called “second liberalization package”.
Fulfillment of normal duties
The Ministry of Finance has not yet adopted any other VAT measures. Therefore, VAT payers must fulfill their normal tax obligations in the form of filing tax returns and reporting in a standard manner.
In this context, please note that if a VAT payer decides to extend the maturity of its invoices for its customers, for example because their solvency is affected by government restrictive measures, this does not defer the obligation to pay VAT on the relevant taxable supply. In other words, the VAT payer must always pay the tax regardless of whether the customer has paid it for the transaction. In particular, we draw attention to the case of leases, where the landlord has arranged a repayment schedule with the lessee, on the basis of which the VAT is paid. The fact that the landlord and the lessee agree to postpone the maturity or reduce the rent does not in any way affect the obligation to pay VAT.