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Czech Republic Combats VAT Evasion On Fuel

By Ulrika Lomas, Tax-News.com, Brussels

26 November 2012


The Czech Republic recently announced plans to amend the Fuel Act and the Trade Licensing Act ahead of the establishment of fuel distribution as a new licensed trade, in order to combat value-added tax (VAT) fraud said to amount to CZK5bn to CZK8bn (USD400,000) annually.

The plan is for the Fuel Act to be modified as soon as possible, and the Trade Licensing Act from February 2013. In the first stage, distributor registration conditions will be tightened to include checks on a distributor's credit, integrity, and licence, as well as the payment of security. Also, the current registration entitlement procedure will no longer apply. Following this, record-keeping obligations will be made more extensive and opportunities to falsify sales records, such as recording lubricating oil as diesel and making sales without the use of the cash register, will be eliminated.

The Minister of Industry and Trade, Martin Kuba, and the Minister of Finance, Miroslav Kalousek, unveiled the measures jointly. Kalousek explained that fighting tax evasion is "a marathon," and he highlighted the complications caused by the harmonization of indirect taxes at the European Union level. Kalousek added that the new measures were an alternative to implementing a reverse-charge on VAT on fuel, which the EU had opposed.

TAGS: compliance | Finance | tax | value added tax (VAT) | tax compliance | energy | Czech Republic | trade

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