Recently, ECJ in its decision C‑446/18 AGROBET CZ, s.r.o., contrary to AG J. Kokott conclusion, ruled, that local CZ legislation, that does not allow partial refund of excess VAT claimed, is not inconsistent with the VAT directive, unless it is possible to clearly determine, that an undisputed part of the excessive deduction exists.
In CZ in the legislative proceedings there was an amendment to CZ tax administration act that would allow partial refund of the VAT excessive deduction before the VAT audit performed by the tax authority is finalized. This bill, however, has been suspended, a few days after the above mentioned ECJ ruling.
This topic has two angles of view – one is that the tax authority has to clearly identify undisputable part of the VAT claim to be able to refund, another is that long lasting tax inspection connected with a VAT claim retained by the tax authority may bring the business entity on the verge of bankruptcy.
Ondřej Štědrý
Tax Adviser
Prague
Czech Republic
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