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Prague – Small corporations primarily based in one other EU member state that don’t exceed a turnover of two million crowns per calendar yr would newly not need to fall beneath the VAT regime. They’ll thus have the ability to use the non-VAT payer standing in a member state apart from their house state. That is envisaged by the modification to the VAT Act, which was permitted by the Chamber of Deputies as we speak.
Based on the explanatory memorandum, along with the home regime for small companies, the modification introduces a so-called cross-border regime. Below the present legislation, Czech corporations whose turnover within the final 12 months doesn’t exceed two million crowns are usually not topic to obligations associated to VAT, reminiscent of management studies or tax funds. Firms primarily based overseas are topic to VAT obligations from the primary transaction carried out within the Czech Republic.
The modification transposes into Czech legislation a European directive that ought to enable small corporations primarily based in one other EU member state to additionally make the most of the exception. The directive will even enable small Czech corporations beneath the identical circumstances to make use of the non-VAT payer regime in different EU international locations. (October 30)
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