Proposed Amendments to VAT Act: Impact on Deduction Limits and Taxpayer Registration Requirements

• Financial Administration clarified deduction limit on M1 passenger cars effective from 2024
• Deduction limit on cars leased under finance leases applies to lessee, not lessor
• Taxpayer unable to claim full deduction, subsequent sale of car still subject to VAT
• Ministry of Finance unveiled draft amendment to VAT Act effective from 2025
• Amendment proposes additional limit of EUR 100,000 for registering taxable persons as taxpayers
• Time limit for tax base corrections to be extended to seven years
• VAT Act to address new scenarios for VAT refunds to creditors, including provision for tax base reduction adjustments for minor debts
• Proposed shortening of time limit for right to deduct tax to roughly two years
• Debtor forfeits right to deduct tax if payment not made within 6 months from due date, with option to reclaim upon payment
• Amendment open for comments and expected to undergo significant modifications.

Source: dreport.cz

Note that this post was (partially) written with the help of AI. It is always useful to review the original source material, and where needed to obtain (local) advice from a specialist.

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