Correction of VAT in case of insolvent debtors
27.10.2011Company: Amcham
GFD information on the correction of VAT in case of insolvent debtors
General Financial Directorate issued
Information on the application of section
44 of the Act on VAT, effective from
April 1, 2011, i.e. on the correction of tax
amount in case of receivables to insolvent
debtors. This provision gives the supplier
(creditor) opportunity to correct the tax
amount on the output if the client (debtor)
has not paid him for the goods delivered
or service provided and is in insolvency
proceedings. We discussed section 44
in more detail in this May issue.
Despite the previously released detailed
Information of the Ministry of Finance there
have been interpretative variances in practise.
General Financial Directorate confirms
the data of the Ministry of Finance and adds
the following conclusions:
1. The correction of tax amount in
accordance with section 44 of the Act
on VAT may be done also in case
of receivables that arose before
April 1, 2011.
2. The claim of tax administrator
corresponding with the arising debtor’s
obligation is a VAT receivable
for the taxation period in which
the correction was done in accordance
with section 44, and is a property
receivable (claim that arose after
the commencement of insolvency
proceedings; these claims are usually
fully settled).
Complete version of the above mentioned
Information of the Ministry of Finance
and General Financial Directorate may be
found on the web page of Czech Tax
Administration www.cds.mfcr.cz.
Ing. Zdeněk Tajcner
IB Grant Thornton
Na Bojišti 18
CZ-120 00 Praha 2
T +420 296 152 111
F +420 296 181 483
E zdenek.tajcner@cz.gt.com
