Employment benefits and VAT in a Special Issue of KPMG’s Financial Update
22.04.2010Company: KPMG Česká republika, s.r.o.
Find the latest tax, accounting and legal changes crucial for the financial sector in the April Special Issue of Financial Update, KPMG Czech Republic’s monthly bulletin.
The Chamber of Deputies approved an amendment to the VAT Act, which had been returned by the President and which repeals the obligation to apply Section 36a of the VAT Act to transactions between the employer and its employees, i.e. the duty to set the VAT base using arm’s length prices. The amendment affects the taxation of certain employment benefits (such as travel fares paid for by the employer, company meal provision, products purchased at reduced prices, advantageous prices at company accommodation facilities, etc.). As a result of the repeal of this provision, the VAT base in respect of these transactions (if carried out for a consideration) will be determined using the method effective before 1 January 2010, i.e. based on the amount of the payment made for this kind of performance.
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