The criteria for the status of an unreliable payer have been widened. Starting from 1 January 2018, a payer whose reported VAT is significantly different from the amount calculated by the financial authorities may fall into the category of an unreliable payer. A “significant difference” is defined as a VAT difference of CZK 500,000 or higher as calculated by the tax office which has not been paid within the corrected payment deadline. Still, however, the principle of purposeful dishonest conduct applies.
A new possibility has been added to the current ones, which are:
• A tax deduction of at least CZK 500,000 has not been recognized
• A tax subject has owed VAT of CZK 500,000 for at least 3 months
• The tax-related documentation is insufficient and a penalty of at least CZK 500,000 has been imposed
• A reasonable suspicion of illegal conduct
• An unsettled withholding order
• A subject does not submit a VAT return twice within a period of 12 months without explanation even if requested by the financial authority
• Information on the company’s seat address is incorrect (virtual addresses)
