VAT liability and payment to an undisclosed account through the lens of the SAC’s decision

The Supreme Administrative Court concluded that when a taxable supply is paid to the account of a supplier not disclosed by the tax administrator, the recipient of the taxable supply is not automatically liable for VAT. In the court’s view, it is necessary to test the good faith of the recipient of the supply, i.e. whether they knew or should have known and could have known that the VAT would not be paid by the supplier. The conclusion of the court is contrary to the normal practice of the tax administration of the Czech Republic.

Source: Deloitte CZ

---

---