Registration for VAT – what information are tax offices entitled to?

20. December 2018

Tax offices cannot demand information from entrepreneurs upon registration for VAT in a blanket manner, follows from a recent judgement of the regional court in Brno. The offices must provide clear and substantiated reasoning for why they suspect the information to be incomplete or incorrect. Upon voluntary and obligatory registration, tax offices ask for proof of ongoing economic activity, lease contracts, property, number of phones, and more detailed information which is beyond the scope of obligatory information. They often do not state why they are asking for the additional information, do not provide reasons for doubts about the economic activity, and often send out formal notices asking for this information to be provided. The law does not state what information regarding taxpayers are tax offices entitled to.

The court ruled that the tax administration must specify reasons for their doubts about the completeness or correctness of specific information stated in the registration form for VAT, and the facts from which these doubts stem. The judgement clearly shows that the notices should not be sent out in a blanket manner and that taxpayers should not immediately be seen as cheaters. The most problems so far have arisen in the area of voluntary registration. Tax offices demand a great amount of information and documents which are beyond the scope of information necessary for tax administration.

The financial administration is denying this claim and according to the GFD, the tax administration checks the obligatory information stated in the VAT registration form and if any doubts arise about the correctness or completeness of this information, the administration asks the applicant to provide explanation.

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