Pending Amendment to the Value Added Tax Act

What is new under the draft is the introduction of the tax authority’s new editing duty regarding binding assessment of tax rates. The tax authority shall be obliged to issue the relevant decision within 30 days after the application has been filed. If the decision is not issued the application, including the proposed rate, shall be deemed to have been approved.

Filing of tax returns is planned to change as well. Payers subject to statutory monthly taxation shall be obliged to file VAT tax returns electronically, including summary reports. If a taxpayer files a VAT tax return on a paper form, the tax return shall be deemed not to have been filed.

The construction industry is yet another area to be subject to major changes. Construction, reconstructions, repairs and sale of buildings for “social living” shall be subject to the reduced tax rate. Other constructions are to enjoy the reduced rate only if repairs and reconstruction of apartment and family houses are involved.

All newly proposed provisions should take effect on 1 January 2008, save for the section applicable to the filing of tax returns via electronic means that is scheduled to take effect on 1 January 2010.

In addition to the changes referred to above, a group of deputies presented a draft to be discussed by the Chamber of Deputies under which wood fuel should be subject to the reduced tax rate instead of the current basic rate.