Acta Univ. Agric. Silvic. Mendelianae Brun. 2010, 58, 67-78
Published online 2014-09-27

The specifics of applying value added tax for local authorities

Miloš Grásgruber, Petra Mísařová

Ústav účetnictví a daní, Mendelova univerzita v Brně, Zemědělská 1, 613 00 Brno, Česká republika

If local authorities units carry out an economic activity, are considered to be taxable under Act No. 235/2004 Coll., On Value Added Tax as amended. Adjustment of VAT in all countries of the European Union is based on Council Directive 2006/112/EC of 28 November 2006 on the common system of value added tax as amended. The application of this directive is binding for all EU member states and national treatment of VAT may diverge from the Directive only in cases where the Directive permits. Decisions of the European Court of Justice are of considerable importance during the interpretation of the Czech VAT Act.
For the municipalities and regions article defines the activities that are considered to be an economic activity and activities that are deemed to exercise of public administration and are not therefore subject to VAT. Further the paper defines the concept of turnover of local authorities. At paper there are evaluating the impact of the application of VAT on municipalities and regions in the provision of the individual fulfillment. Great attention must municipalities and region devote to the problem of correct application of claim to tax deduction if they carry out the exercise of public administration, taxable activities and fulfillments exempt from VAT.


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