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Use And Enjoyment Of Intangible Services: The Czech Republic's Vat Derogation, Richard Thompson Ainsworth
Use And Enjoyment Of Intangible Services: The Czech Republic's Vat Derogation, Richard Thompson Ainsworth
Faculty Scholarship
On January 1, 2009 a minor change in the Czech Republic VAT became effective. A use and enjoyment standard was added to modify the sourcing of certain service transactions. Traditional proxy-based rules, derived from Articles 43 and 56(1) of the Recast VAT Directive (RVD), are set aside by this modification when the customer receiving the services has a permanent establishment (PE) in the Czech Republic. The modification is authorized by RVD 58.
This change is a limited adoption of RVD 58(b), and functions like a full force of attraction principle in direct taxation. If caught by these rules, transactions that …