The Amendment to Act no. 235/2004 Coll., On Value Added Tax (hereinafter referred to as "VAT Act") being effective from January 1, 2016, establishes a new obligation to submit so called inspection report.
Inspection report is a new kind of tax return which does not replace the regular VAT return nor recapitulative statement. Its aim and purpose is to enable the tax authority to obtain information on selected transactions made by VAT payers and identify risk associations of persons (chains, carousels) withdrawing illegally funds from the state budget.
Legal entities are obligated to file the inspection reports on monthly basis. In case of natural persons, the reference period reflects the tax period for submitting VAT returns. The first inspection report will have to be filed by legal entities in respect of January 2016 or of 1Q 2016 speaking of natural persons with quarterly tax period.
The tax-payer is not obliged to file the inspection report in case it did not perform and did not receive any taxable supply in the respective period, or if it performed only tax exempt supplies without the right to tax deduction according to § 51 of the VAT Act.
Inspection reports can be submitted only electronically in the format and structure published by the tax authorities.