The time has come... feared by many and wished for by few, the long-awaited, almost revolutionary bill on the control statement became effective on 1 January, 2016. It means that, starting on that day, all those who are registered to VAT in the Czech Republic are obliged to submit, along with the VAT report, the so-called control statement. Administratively, such a deed is not going to be a stroll in the park, and that is why we are bringing you a short introduction.What purpose (or perhaps, whose purpose?) does it serve?
As the official statement of the Financial Administration informs us, the Control Statement is to be "an effective tool to detect and prevent tax evasion and fraud" and „Its aim and purpose is to enable the tax authority to obtain information on selected transactions carried out by taxable persons registered for VAT and together with other available information to identify suspicious groups of taxable persons". Well, rather a daring and ambitious aim of the Ministry of Finance. But we all know what they say: Only time will tell...
What does it look like?
The Control Statement is a report containing VAT payer's domestic taxable supplies both provided and received and is divided into three parts.
· Part A contains taxable supplies from which VAT is to be declared, and provided supplies in the reverse charge regime
· Part B refers to received taxable supplies with the place of supply in the Czech Republic, and received taxable supplies in the reverse charge regime
· Part C is a merely check section recapitulating the data from the above-mentioned Parts A and B
How often?
The Control Statement is to be submitted on a monthly basis with a possible exception of physical/natural persons who submit it after the respective taxable period has ended (i.e. a quarterly payer will submit the CS every three months along with the respective tax return).
Deadlines
The Control Statement is to be submitted no later than the 25th day after the respective taxable period has ended (yes, 25 February is the day for January Control Statement).
Penalties
Failing to meet the obligations connected with the obligations concerning the Control Statement may (and, somewhat surprisingly, will) be penalised by fines ranging from CZK 1,000 to CZK 500,000 depending on the seriousness of the offence.
As one can see, the penalties can be rather high, and that is we feel we ought to recommend that you check with your IT supplier is able to generate the data automatically from your accounting system. If not, we shall be happy to give you a helping hand with setting the system or even advisory services relating to VAT and CS.
