Communication by the Ministry of Finance24/03/09 / cata_tax-news

• Communication by the Ministry of Finance Ref. No. 18/13276/2009-181 dated 27 January 2009 – How to Determine the Tax Rate Applicable to Waste Collection, Removal and Disposal

Effective 1 January 2009, the text of Schedule No. 2 to Act No. 235/2004 Coll., the VAT Act, has been amended to newly include item “SKP 90.02.11 – Collection and Transportation of Communal Waste” in the items subject to a reduced VAT rate. The VAT Act does not provide an independent definition of “communal waste” but the Ministry has instructed that the definition be taken from Act No. 185/2001 Coll., the Waste Act. On the other hand, waste similar to communal waste but generated by non-production operations of corporations or small businesses (individuals authorized to be engaged in business) should not be included in this definition.

• Decision by the Ministry of Finance of the Czech Republic Abolishing the Duty to Pay Tax Advances

The Financial Bulletin (Finanční zpravodaj) No. 3/2009 dated 25 February 2009 included a decision by the Ministry of Finance of the Czech Republic that abolishes the duty to pay tax advances, taking effect on the same date of 25 February 2009. The decision abolishes the duty to pay income tax advances under Section 38a of the Income Tax Act and is scheduled to take place in 2009. The abolishment does not apply to all payers but only to individuals and legal entities without employees or with records of no more than 5 employees as on 1 December 2008. Payers who comply with the above requirements may apply this decision on tax advances due on 16 March 2009, as 15 March 2009 is a Sunday.

• Faster VAT Refund

On 19 February 2009, the Ministry of Finance issued instructions to tax authorities to commence expediting the refund of large VAT deductions. If the application is filed electronically and the tax authority has no doubts or objections to the accuracy of the data in the tax return, the refund deadline shall be reduced from 30 to 15 days. This measure complies with the Government’s National Anti-Crisis Plan of 16 February 2009. However, the tax authority’s compliance with the deadline cannot be imposed and VAT payers who filed tax returns electronically and received refunds between the fifteenth and thirtieth day following the date of the tax assessment shall not have the right to receive interest on overpayment.