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08.03.2019

Czech Republic: Application for a general reverse-charge mechanism

The amendment is expected to enter into force on 1 July 2020

Key Facts
  • Reverse-charge mechanism would be applicable to all taxable supply of goods and services exceeding €17,500 .
  • After approval by the European Council, the corresponding legislative process will be launched in the Czech Republic.
  • The effort to implement a general reverse-charge mechanism stems from the goal of preventing VAT carousel fraud.
Author
Alena Křížová
CPA
Czech Republic
> View Profile

The Czech Republic has recently submitted a request to the European Commission for the option to use the general reverse-charge mechanism. This scheme would be applicable to all taxable supply of goods and services exceeding €17,500 (CZK 450,000).

After approval by the European Council, the corresponding legislative process will be launched in the Czech Republic. The amendment is expected to enter into force on 1 July 2020. The effort to implement a general reverse-charge mechanism stems from the goal of preventing VAT carousel fraud. The Czech Republic is already using reverse charge in all sectors in which existing EU legislation permits its use. The general reverse-charge mechanism, together with control reporting and electronic sales records (“EET”), would be the main pillars of tax reforms aiming to reduce the gap between expected and collected VAT

Article published in WTS Global VAT Newsletter Q1/2019
Recent or expected changes in VAT and GST regulations and compliance duties in various EU and third countries
View publication
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