Vat Control Statement & Electronic Record of Sales

Abstract

In the Czech legal order some news related to the fight against tax fraud on value added tax (hereinafter “VAT”) appeared at the beginning of 2016. The authors attempted to acquaint readers with two of the most controversial legal institutions – the VAT Control Statement and Electronic Record of Sales. We can enunciate about the VAT Control Statement that it is a legal institution which can portray matching and chaining of VAT taxable supplies in the framework of “value added” to the tax authority. Short-term practice speaks in favour of the suitability of implementation of this legal institution, which is described below. It is necessary to point out that the electronic record of sales is a very debatable topic in the Czech Republic nowadays and after some time we can find out how effective a tool it has become in the fight against tax fraud. Unlike other European countries’ systems of electronic record, the Czech one lays fewer obligations on taxable persons registered for VAT and their customers. It can be summarized that in the case of these legal institutions, while theoretically they serve a legitimate objective and laudable purpose , only practice will show whether the administrative burden imposed on tax payers is reasonable and whether the VAT Control Statement and Electronic Record of Sales will become effective legal institutions in the fight against tax fraud.