The 2013 VAT Act amendment introduced the category of an Unreliable VAT Payer and the following years have brought up stricter rules for an entity to become classified as one. The most substantial change has, so far, been the decrease of the VAT underpayment for a period of three subsequent months from CZK 10m to CZK 500,000.
As the latest statistical data suggest, the number of the ‘unreliables’ has exceeded 10,000 which is approx. 2% of all registered VAT payers. In comparison with 2016, the increase equals more than 45%.
It is important to realize that a business subject becomes a guarantor of the payment of the VAT upon the reception of a taxable supply from an unreliable payer, which is a tool the financial administration makes use of in order to tackle tax evasions. Should you need to verify whether none of your business partners falls into the category, it may be done at the web page.