Zneužití práva při stanovení místa plnění pro DPH

The place of supply of service qualified for abuse of rights

The Supreme Administrative Court has published an interesting judgment 4 Afs 276/2022-54. The complainant provided the service of refurbishing a historical Jaguar vehicle. The vehicle was owned by a Czech owner and during the renovation process was resold in a chain of companies to Austria and finally back to the Czech Republic. The complainant claimed that the Austrian owner owned the vehicle at the time when the renovation service ended and therefore did not apply Czech VAT to the service as the place of supply was in Austria. However, the Tax Authority considered the whole chain of resales to be artificial in order to obtain a tax advantage.

The complainant argued that he did not know about the fraudulent chain and, moreover, his involvement in the chain would not give him any tax advantage. If he had applied Czech VAT, he would have had to pay it to the Tax Authority anyway.

However, according to the Tax Authority and, consequently, the Supreme Administrative Court, the business relations in the chain were so non-standard (payments in cash, no advances, missing work budget, etc.) that they proved the complainant's participation in the abuse of rights. According to the Supreme Administrative Court, the abuse of rights does not always have to be directly to the benefit of the person committing the abuse of rights. It is true that such a person usually pursues his own benefit, but the person may also seek to benefit other entities by acting in this way, which is what happened in this situation.

If you have any questions, please contact the authors of this article or the members of the EY team with whom you usually work.

Authors:

Jevgenija Bajzíková

Štěpán Kvíz