Czech Republic rules on VAT on bad debts
The Czech VAT authorities have changed the allowance of VAT on bad debt relief following a recent Supreme Court ruling.
Following the introduction of bad debt relief in the 2011 VAT Act, it had not been clear if debt from invoices prior to the introduction of the Act where eligible for VAT credits. In April of this year, the Czech Supreme Court ruled that debts arising prior to April 2011 were not eligible to Czech VAT relief. However, as a concession, it agreed that VAT relief already granted to old debts would not be reversed. This in practice means the ruling will have limited impact on most Czech VAT registered businesses.
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