In this article, we would like to inform you about a relatively recent judgment 4 Afs 276/2022-3 concerning abuse of law in determining the place of supply for VAT purposes.

The judgment deals with a case where a Czech company refurbished a Jaguar vehicle owned by an individual, but during the refurbishment the car was sold to an Austrian company. In view of the facts, the Czech company charged the amount for the renovation without VAT. After the renovation, the car was sold back to the Czech Republic.

The tax administrator described this as an artificially constructed chain of resales, at the beginning of which the same person stood at the end of which the vehicle was repossessed. At the time of completion of the renovation, the car was owned by an Austrian company, so the place of taxable supply was not in the Czech Republic and the supplier issued an invoice without Czech VAT.

The Czech company argued that it had no knowledge of the fraudulent conduct and, moreover, would not have received any tax advantage from its participation in the chain, since it would have had to pay the VAT collected from the customer to the State anyway. 

However, according to the reasoning of the Supreme Administrative Court, the abuse of law does not always have to be aimed at the benefit of the person involved in the fraudulent chain, but it can help to benefit other entities, which is precisely what happened in the present situation.

If you have any questions about this area, please do not hesitate to contact us and we will be happy to answer your questions.

Author: Barbora Plšková - Junior Tax Consultant

Contact us

By submitting, you agree .


Our website uses cookies. This allows us to offer you a more efficient user experience. You agree to the storage of cookies by clicking on the 'I agree' box.
You can refuse consent here.