The Czech /Slovak VAT statement is a control mechanism of both tax administrations. In Slovakia, it has been in place since 1.1.2014 and in the Czech Republic it was implemented on 1.1.2016. In both cases the philosophy is the same.
Why is it required?
The tax administrations want to combat so called carousel fraud, fraud which takes place through a chain of transactions. If they can see the details of all of the business transactions then the tax authorities can determine the connections between business partners.
How does the tax administration check what we do?
The tax administration gathers data about VAT supplies and purchases. These are obtained on one hand from the seller, who reports sales of goods and services with VAT. They are also obtained from the purchaser, who reports buying goods or services. Local and EU taxable supplies are reported. The Czech tax administration has a special administration center in Pardubice where the data is cross-checked. The Slovak tax administration works in a similar way.
Because we know how the VAT declaration system works, we are able to ensure reporting of correct and complete data. If we have any Czech /Slovak invoices which should be reported and are unsure about whether the content is correct, we check with the issuer of the invoice and make sure that both sides (the seller and purchaser) declare identical data.
What must be reported?
- All received invoices from EU suppliers (goods or services)
- All issued invoices with an amount over 10.000,- CZK including VAT
- All issued invoices with an amount less than 10.000,- CZK including VAT – cumulative amounts
- All received invoices from Czech suppliers with an amount over 10.000,- CZK including VAT
- All received invoices from Czech suppliers with an amount less than 10.000,- CZK including VAT – cumulative amounts.
What does a “cumulative amount” mean?
If the amount is less than 10.000,- CZK including VAT, certain details for the taxable document do not need to be reported. Just a total amount is required to be reported in this case. Also, if the other party is not a VAT payer, the transaction is included in the cumulative amount.
If the amount on the invoice is higher than 10.000,- CZK with VAT, the following details must be reported:
- The date of the taxable supply
- The invoice number
- VAT number of the other party
- The netto amount
- The VAT amount
If differences are found in the reports of the seller and purchaser, the Czech tax administration issues an appeal questioning the declaration. This must be answered within five working days. If this does not happen a penalty is imposed.
Details of when submissions must be made and the possible penalties are given in the section Deadlines and Penalties.
The VAT statement is a very important tool for tax administrations to combat fraud. That is why tax administrations are very consistent when it comes to their demands concerning reporting. We are able to process the VAT control statement so that possible queries and possible penalties are avoided.
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