On Jun. 11, CZC GVT issued materials for meeting of Jun. 12, 2024.
CZC GVT issued materials for meeting re VAT Act, Women on Boards, other topics.
Draft to amend VAT Act 235/2004
Point 4 Ministry of Finance amendment to VAT Act to implement EU law; technical changes that respond to development of jurisprudence and knowledge from practice.
Changes regime of small businesses in EU i.e. small companies based in another EU state with turnover of less CZK 2 million per calendar year not under VAT rules in CZC.
Same will also apply to Czech small businesses that would like to use this exemption in other EU state, amendment also brings change in calculation of companies' turnover.
Now, turnover calculated for period of 12 consecutive calendar months, it will be calculated for calendar year as is related to new setting of payment origin.
Amendment clarifies conditions enabling use lower VAT rates for construction works.
Expands options re bad debts, possibility of VAT refund in case of unjust enrichment.
State-owned Real Estate Inspection
As point 9 informs of results of inventory of state-owned real estate of last year, re accelerating transfer of unnecessary state real estate, launch 2nd phase of inventory.
483 entities contacted and 1.371 million properties inspected, unnecessary real estate marked by 137 entities, 30,252 real estates (plots of land, buildings, housing units).
Unnecessary real estate 2% of total number of real estate registered to state bodies in real estate register, nearly 97% of real estate is exclusive ownership.
While 3% joint ownership; 15,287 properties were marked for transfer to the ÚZSVM.
Balanced Representation in Management Bodies
As item 28 Ministries of EU Affairs, Justice, Finance, GVT Commissioner for Human Rights present bill to transpose dir on improving gender balance in listed companies.
Bill supports women in management of some business companies; per proposal, listed companies not micro, SME should set goals to have minimum set number of positions of boards of directors, supervisory or administrative boards occupied by women.
Bill also regulates means to achieve goals, mandatory reporting to CZC CB, penalties.
Threatens issuers for non-compliance with set procedures but not for own failure to achieve target, preserves right of shareholders or members of supervisory boards, including staff representatives, to freely designate members of issuer's management.
Jun. 12, 2024 VAT Act Approval
On Jun. 12, 2024, CZC GVT confirmed it had approved amendment to Value Added Tax Act prepared by Ministry of Finance, to bring changes in the regime for small business.
In addition to implementation of EU law, amendment contains a number of substantial minor technical changes from development of both jurisprudence, and from practice.
Small businesses based in another EU member state with domestic turnover less than CZK 2mn per calendar year will not fall under the regime of VAT in the Czech Republic.
Same will apply to Czech small businesses to use this exemption in other EU States.
The amendment will also bring in a change in the calculation of companies' turnover, which is now currently calculated over a set period of 12 consecutive calendar months.
It will in future be calculated per calendar year, which is also related to setting of the origin of payment, with small businesses that exceed CZK 2 million in turnover during the year will only then become VAT payers from Jan. 1 of the following calendar year.
However, if the turnover exceeds the amount of CZK 2,536,500, which equates to a common EU amount of EUR 100,000, then they become VAT payers the very next day.
Proposal also clarifies conditions in the area of tax rates in the construction industry, exemption from tax in case of the supply of buildings and land, expands the options in area of bad debts, introducing new VAT refund institute in case of unjust enrichment.
Amendment includes abolition of tax refunds for persons with disabilities when buying a car, which will be compensated during next legislative process by changing law for Ministry of Labor and Social Affairs so there is no loss of support for disabled people.
It also projects end of three-year exception to limitation of VAT deduction for cars over CZK 2 million, for which the Czech Republic obtained EU approval at VAT Committee, according to Article 177 of Directive 2006/112, for a period of three calendar years.
Jun. 28. 2024, CZC PRL VAT Act Support
On Jun. 28, 2024, CZC GVT announced the Chamber of Deputies in CZC PRL supported amendment to Value Added Tax Act prepared by Ministry of Finance, in a first reading.
The law will bring changes in the VAT regime for small businesses, for example the possibility to use the exemption from paying VAT in other EU member states as well.
In addition to implementation of EU law, amendment contains a number of substantial minor technical changes for jurisprudence development, and knowledge from practice.
Proposal also clarifies conditions in the area of tax rates in the construction industry, exemption from tax in case of supply of buildings and land, expands options in area of bad debts, and it introduces a new VAT refund institute, in case of any unjust charging.
Amendment also includes abolition of tax refunds for disabled when purchasing a car, which will be compensated during the next legislative process by changing law under responsibility of Ministry of Labor and Social Affairs, so there is no loss of support.
Sep. 2024 Act Amended at Second Reading
On Sep. 11, 2024, CZC GVT noted CZC PRL supported changes to Value Added Tax Act at second reading on amendment 4827 (26083-40597) by Igor Hendrych and others.
Includes amendment 4834 (26090-40610), as led by deputy Ing. Mariana Jurecka.
The bill passed the general debate on Sep. 11, 2024 at the 112th sitting, and the bill passed a detailed debate on Sep. 11, 2024 at the 112th sitting.
The submitted amendments were processed by press (Bill 726), Sep. 11, 2024.
One main topic of the amendment is transposing directive on small businesses regime.
Amendments change calculations on certain aspects including for disabled people.
VAT Act takes effect on the first day of the calendar month following promulgation.
The provision of Article III, as set out by CZC GVT, effective Dec. 31, 2024, which means VAT Act will be effective next calendar day on Jan. 1, 2025.
Provisions of first part of Article I, points 2, 5, effective Jan. 1, 2027, not 2025.
Regulators
CZC GVT; CZC PRL
Entity Types
CNSM; Corp
Reference
Bill 726/3, PR 9/11/2024; PR 6/28/2024; PR 6/11/2024; VAT Act (CZC); Dir 2006/112/EC; ESG;
