Requests made to Czech Republic regarding functioning of its VAT regime

The request was successful.

Dear Taxation and Customs Union,

Under the right of access to documents in the EU treaties, as developed in Regulation 1049/2001, I am requesting documents which contain the following information:

(Czech media reports that recent changes to the way the Czech tax authorities consider new applications from entities wishing to register for VAT are in part driven by requests from the European Commission to "tighten" the VAT regime)

I therefore request copies of any documents or email correspondence sent by this department to the Czech tax authorities in the last 24 months which either

- refer to perceived deficiencies in the Czech VAT law and/or practice in collecting the tax
- make demands or proposals for changes to the Czech VAT law and/or practice in collecting the tax

My postal address is

Uralska 3
160 00 Prague 6
Czech Republic

But I request that your reply be sent via this website.

Yours faithfully,

Richard Hunt

Taxation and Customs Union

Dear Sir,

Thank you for your e-mail dated 16/02/2016. We hereby acknowledge receipt of your application for access to documents, which was registered on 17/02/2016 under reference number GestDem 2016/751.

In accordance with Regulation (EC) No 1049/2001 regarding public access to European Parliament, Council and Commission documents, your application will be handled within 15 working days. The time limit will expire on 09/03/2016. In case this time limit needs to be extended, you will be informed in due course.

You have lodged your application via the AsktheEU.org website. Please note that this is a private website which has no link with any institution of the European Union. Therefore the European Commission cannot be held accountable for any technical issues or problems linked to the use of this system.

Yours faithfully,

TAXUD ACCESS TO DOCUMENTS

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Taxation and Customs Union

Dear Mr Hunt,

In order to be able to proceed with you request could you please send us a copy of the article in the Czech media to which you refer in your demand below ?

Kind regards,

TAXUD ACCESS TO DOCUMENTS

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Dear Taxation and Customs Union,

Yes, although the article of course is in Czech.

Here is the link:
http://archiv.ihned.cz/c1-65165030-na-fi...

and the relevant text, in the answer from the director of the GFR tax office to the first question in the interview, is:

Kdo má podle vás zájem na poškození finanční správy v médiích?
Útoky nejsou podle mě z úplně legálního směru. Přitáhli jsme kohouty, zpřísnění registrací po nás přitom chtěla i Evropská komise. Začali jsme s ním před rokem, problém nastal až letos v lednu.

Let me know, if I can provide anything further which assists in providing your answer

Kind regards

Richard Hunt

Taxation and Customs Union

1 Attachment

Dear Mr Hunt,

We thank you for your request.

Please find herewith our reply.

Best regards,

Sabine Verleysen
European Commission
DG TAXUD – R2
Access to documents

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Dear Taxation and Customs Union,

Please pass this on to the person who conducts Freedom of Information reviews.

I am writing to request an internal review of Taxation and Customs Union's handling of my FOI request 'Requests made to Czech Republic regarding functioning of its VAT regime'.

I am not making the request as a "complaint". I do understand and respect the reasons why the Commission feels unable to provide me with the full document that corresponds to my request. Furthermore some of the information in your letter is helpful to me, and I thank you for it.

I would therefore like to ask if you could clarify your answer further, without sharing with me the actual document in question.

As background, the report I sent you is related to new provisions imposed by the Czech government on every single commercial entity which is registered for VAT, no matter how small the entity in terms of turnover. For your information the current turnover threshold is €37,000 annually for compulsory VAT registration. Smaller companies can submit their VAT returns only quarterly. However legislation rushed through last autumn and starting in Jan 2016, requires all such entities to give the Tax Office -MONTHLY - details of every single incoming and outgoing invoice or receipt. It is called invoice-matching. It is supposed to deter VAT fraud. And the European Commission pressure was cited as one reason for passing this legislation (as shown in the press item I sent you.

In your helpful answer you mention two VAT issues discussed in the meeting in Dec 2014:

1. VAT fraud in the field of fuel and diesel
2. De-registering fraudulent taxpayers from the VRIES system.

Neither of these items seem to be related to the blanket imposition of invoice matching on entities with a total annual turnover of €37,000.

Therefore I would like to ask if you could simply confirm whether ( as I understand it) these were the only two aspects of the VAT regime in the Czech Republic which concerned the Commission and was discussed at the meeting? Was there any other potential defect in the Czech VAT legislation which was discussed in that meeting, which the EC urged the Czech authorities to address (and which could then be categorised as "pressure" even if this pressure is applied correctly and for good reasons).

If this request for further clarification could be considered and answered. I would be most grateful.

A full history of my FOI request and all correspondence is available on the Internet at this address: http://www.asktheeu.org/en/request/reque...

Yours faithfully,

Richard Hunt

Taxation and Customs Union

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Dear Mr Hunt

 

In response to Your request we can confirm the following.

 

During the visit the Commission encouraged Czech Republic to look at
improving its tax administration practises. We can inform you that only
the topics of VAT fraud in the field of fuel and diesel and de-registering
of fraudulent taxpayers from the VIES system were discussed during the
meeting. We can confirm that the Commission did not suggest to Czech
Republic introducing additional reporting requirements to businesses.

 

Tax administration is an exclusive competence of Member States. The role
of the Commission is to make sure that Member States do not impose
obligations that are not in line with EU legislation. In addition the
Commission is also responsible for making sure that Member States have
adequate tools to cooperate amongst themselves. As a result when it comes
to administering taxes the Commission is generally looking at the issues
of cooperation between different administrations, cross-border cooperation
between tax authorities, enhanced exchange of information and mutual
assistance.

 

In the last years a number European Member States introduced their own
systems that require businesses to provide detailed reports on supplies
and purchases. Until now there is no systemic overview of how successful
and justified such systems are in terms of improving tax collection.
Currently the Commission is taking steps towards compiling such an
overview.

 

Hopefully this answers Your questions.

 

Best regards

 

Maksim Baranov

Seconded official

 

[1]cid:image001.png@01CFF291.E2FD3B20

European Commission

DG TAXUD/C4 - SPA3 05/35
B-1049 Brussels/Belgium
+(32) 2 2959060

[2][email address]

 

References

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Dear Taxation and Customs Union,

Thank you for this reply. It is most helpful, and I really appreciate your timely and intelligent response to my question

Yours faithfully,

Richard Hunt