Business Problem

According to the new amendment to the Czech tax act on Value Added Tax (VAT), VAT-payers who have seriously violated the administration of value added tax will be deemed unreliable VAT-payers and Customers who receive supplies from unreliable VAT-payers will become guarantors of any outstanding VAT on supplies.

  • VAT-payers who have seriously violated the administration of value added tax will be deemed unreliable VAT-payers
  • Customers who receive supplies from unreliable VAT-payers will become guarantors of any outstanding VAT on supplies
  • The only way  for customers to avoid this obligation is to pay VAT on supplies directly to Czech tax authorities, instead
    to unreliable VAT-payers.

Solution

The Czech government regularly updates the status of unreliable VAT payers on their website. The link to the website is http://cds.mfcr.cz/cps/rde/xbcr/cds/2013_Nespolehlivy-platce.pdf

Option 1.

The reliability of VAT tax payers can be checked regularly using their tax identification number on the website. This is manual activity and allows only 1 tax identification number at a time.

Option 2.

A webervice is available on the website to read the Reliability status of VAT tax payers in a batch of 100 Tax identification numbers. The technical parameters of the webservice can be found on http://epodpora.mfcr.cz/33-1218.html

An interface can be created between SAP and the goverment website using the web service. The data read can be uploaded in SAP database table.

The user can be presented with a report to display the list of Reliable VAT tax payers. Alternately, enhancements can be implemented to retrict payments to VAT tax payers with a ‘Not Reliable’ status.

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