Czech authorities review import VAT deferment scheme
- European News
- 1 January 2013 | Richard Asquith
The Czech Republic offers one of the most popular import VAT deferments schemes in Europe, potentially enabling importers to avoid cash flow payments on import VAT. As a result, the Czech Republic is one of the most popular import hubs in Central Europe.
However, the Czech VAT authorities are taking a closer look following a review of VAT take, partly caused by errors by Czech Customs in processing the deferments scheme. They have also identified registered importers at being at fault due to incorrect form / return completion, or using the wrong exchange rates. The outcome is the conclusion that there is a multi-million EU VAT import gap.
It is now anticipated that there may be more audits of traders operating under the Czech import scheme. In particular, investigating companies that did not have the full right to deduct (or claim credits back) import VAT. For example, in group trades where the title is not taken by the importer and so no VAT is deductible. Incorrectly using the import scheme would cost the tax payer.