The General Financial Directorate informs

Application of VAT for real estate after 1 January 2015

The information has been expected since the beginning of the year because the amendment to the VAT Act passed at the end of 2014 contained changes to the application of VAT for real estate that became effective from 1 January 2015. The General Financial Directorate provides an interpretation of many terms, and the application of provisions mainly related to determination of a rate or the possibility of tax exemption for the delivery and rent of real estate. As an example, we can mention the newly introduced term "a plot of land forming a functional whole with a building firmly connected with the ground", which means a plot of land that is used for maintenance of the building firmly connected with the ground or that fulfils its function or is used together with such a building.

The published information replaces the previous interpretation valid for the provision of the act since 1 January 2014. Please note that this information is valid for 2015 and does not contain an interpretation of changes approved by the amendment that will be effective from 2016. This relates in particular to future changes to an exemption for the delivery of real estate.

Transferred tax liability regime for the delivery of certain commodities with a tax base exceeding CZK 100,000

With respect to the extension of the transferred tax liability regime to cereals and technical crops effective from 1 July 2015, the General Financial Directorate updates the information on this issue. Moreover, the General Financial Directorate published answers to some frequently asked questions about application of transferred tax liability for the delivery of goods or services stipulated in the respective governmental provision. The questions relate, for example, to side expenses, gradual delivery, repeated supplies, tax documents, or extracts from records.

Inspection report

In addition to detailed information on the inspection report that most taxpayers will have to submit from 1 January 2016, the Ministry of Finance published on their web pages a preliminary XML structure of the report so that tax payers may prepare for this duty. More detailed information on who will be obliged to submit the report, what it will contain, and the form of the submission is available in our KempHoogstad Tax News 7/2015.