New Vehicle Definition Expanded for VAT Purposes


Among others, the latest amendment to the VAT Act includes a new definition of a new vehicle in respect of the value added tax - as it stands, it is any means of transport designed for road, sea or air transport with cylinder volume bigger than 48 cm3  or whose power output exceeds 7,2 kW. Also, the interval between the delivery of the vehicle and putting it into operation may not exceed 6 months, and/or the vehicle's mileage is less than 6000 km.

To the above, vehicles not intended for road transport (i.e. those that are not issued with a license number), such as off-road/all-terrain vehicles, have been added.

When a new vehicle, which is subject to registration duty, is purchased, the transaction is taxed in the country of usage/consumption, i.e. the VAT is to be declared and paid by a VAT payer, an entity registered to VAT or a physical person who purchases a vehicle from another member state VAT payer/entity registered to VAT. It means that if, for instance, a physical person purchases an ATV, which otherwise fits the amended definition of a new vehicle, from a VAT payer in another member state, the VAT need not be declared and paid in the Czech Republic.