Notification to Section 45e of the Act on Value Added Tax
in the interests of ensuring the universal application of Act no. 588/1992 Coll., on Value Added Tax, as amended by Act no. 322/2003 Coll., in effect from 1.10.2003 (further, "VATA"), the Ministry of Finance issues this notification:
A foreign individual (further, "tourist") may, pursuant to the above-mentioned amended Act claim his/her entitlement for the return of the tax as long as: he/she bought the goods from a vendor who is a payer of VAT and the price of the goods, including tax, paid to a single vendor in one calendar day is more than 2,500 CZK and/or he/she takes the purchased subject goods out in a travelling relationship and/or these goods are not of a business nature.
Goods, that are not of a business nature pursuant to Section 2 letter g) of Act no. 13/1993 Coll., Customs Act, as amended, are those goods that are casually passed through the proposed customs system and which, due to their type and quantity are exclusively determined for personal use or consumption of the recipient or traveller who is bringing them in or taking them out and for members of his/her household or if they are intended to be given as a gift.
An entitlement for the return of tax does not arise in the type of goods such as, hydrocarbon fuels and greases, tobacco products, alcoholic beverages, foods and other goods stated in the numeric code of the Harmonised system in chapters 1 to 21.
Neither is a claim of entitlement possible for the return of taxes when, the purchased goods are assembled or worked upon in the Czech Republic (further, "CR") as a part of provided services, into articles that have been brought into the Czech Republic and then these articles are re-presented outside the CR because this is no longer an output of the classified type of goods.
The tourist is entitled to make a claim if the bought goods are taken out within 60 days (previously 30 days) from the date of making the purchase as stated in the evidence of purchase of the goods and the clearance of the goods is validated by the border customs office on a form issued by the Ministry of Finance.
The form issued by the Ministry of Finance must not contain any amendments carried out by another person. Amendments are understood to be any changes that may impair or change the previous information on the form or after the validation of the form by the border customs office the information is re-written or subsequently corrected.
It is not considered to be an amendment if the VAT taxpaying vendor fills out the Ministry of Finance form for the tourist directly at the place of purchase and states his/her accounting or other necessary details on the form or a person authorised to do so states his/her identification details on the form. The statement of identification information alone is no authorisation and therefore the VAT taxpayer who sold the goods is obliged to return the tax directly to a tourist who presents him/her self to the VAT taxpayer with such a form. The information of the Ministry of Finance form may only be marked if it may be assumed that this will not lead to any impairment of the formerly printed information.
The entitlement for the return of the tax is always claimed from that VAT taxpayer and only at that place where the goods were purchased, without regard to the fact that the VAT taxpayer may have other shops. The VAT taxpayer is obliged to return the tax if the conditions stipulated by the law are fulfilled.
The VAT taxpayer who has returned the tax, shall state this fact, at the earliest, in his/her tax return for the tax period in which the return of the tax took place and at the latest, within 3 years from the end of the tax period in which the taxable event took place. The VAT taxpayer is obliged to retain the validated form of the export of the goods for a period of 10 years from the end of the calendar year in which the tax obligation arose.
An entitlement for the return of the tax to a tourist ceases if that person or an authorised person does not present evidence (evidence of the purchase and a validated Ministry of Finance form) to the VAT taxpaying vendor within 3 calendar months from the end of the calendar month in which the purchase of the subject goods took place.
Nothing in the manner of filling out the Ministry of Finance forms is affected by the amendment to Act no. 322/2003 Coll., VATA.
The Ministry of Finance forms that have been in use up to now, currently remain valid with the proviso that on the back information page of the form the information stated in points 1, 3 and 4, the previous text is replaced by the following:
1.A foreign individual who does not have a permanent residence or usual place of residence and this place is written in a passport or other evidence of identity, which the Czech Republic recognises as a valid document and is a person older than 15 years of age.
3.The export of the goods takes place within 60 days of the date of purchase.
4.The entitlement may be claimed at the latest, by 3 calendar months from the end of the calendar month in which the purchase took place.
Even though the sum of 1,000 CZK is stated in the last line on the back information page of the Ministry of Finance form, as a result of the amendments to the provisions of the Act, it is the sum of 2,500 CZK that is valid.
The English language version of the text on the back information page is looked upon in the same manner.
The subject of the amended provisions of Section 45e of the VATA becomes effective from 1.10.2003, therefore the purchase of goods by a tourist that take place up to 24.00 h. (midnight) on the 30.9.2003 will be considered pursuant to the previous version of the provisions of Section 45e of the VATA in relation to the amount (1,000 CZK) for the purchased goods and also the definition of the types of goods.
With purchases that take place after the stated time delineation, it is no longer possible to claim an entitlement for the return of taxes for those types of goods such as, hydrocarbon fuels and greases, tobacco products, alcoholic beverages, foods and other goods stated under a numeric code of the Harmonised system in chapters 01 to 21.
Ing. Bc. Robert Szurman