Guaranteeing Unpaid Tax

The guarantee requirement imposed in Section 109(2)(c) of the Value Added Tax Act took effect on 1 April 2013.

The provision requires recipients of a taxable supply to guarantee unpaid VAT if the payment for the taxable supply is wired (regardless of whether in full or in part) to any account other than the one which is listed by the tax authority as the provider’s account.

The General Tax Directorate is aware that the guarantee system and the procedure for reporting, verifying, and listing the number of accounts of VAT payers is not fully functional and is still pending, which is why it decided to refrain from calling upon guarantors to pay until 30 September 2013.

A number of problems also exist, such as the numbers of some accounts are listed which the tax entity did not want listed and, vice versa, i.e. numbers made available for the listing were actually not listed, which may make business difficult for the tax entities. Therefore, we recommend double checking the account numbers listed by the tax authorities at www.daneelektronicky.cz and, where applicable, finding an appropriate solution with the tax authority.