Czech VAT revenues grow to CZK 278bn in 2012

Prague, Feb 6 (CTK) - Czech value added tax (VAT) revenues grew to Kc278.052bn last year from Kc275.19bn in 2011, with the state budget receiving Kc199.7bn of the amount and regional governments and municipalities the rest, server Tyden.cz has said, citing data of the General Financial Directorate.

VAT liability amounted to Kc544.4bn last year. However, tax authorities returned Kc266.4bn to VAT payers in the so-called excessive deductions last year, which was almost half of the amount registered for VAT liability.

In 2011, VAT liability amounted to Kc532.4bn. Authorities returned Kc257.3bn to tax payers in excessive deductions and the state collected Kc275.19bn in the end. The state budget received Kc191.9bn in VAT revenues in 2011.

Excessive VAT deduction, after which the state returns VAT back to companies, occurs when the tax paid during the purchase of goods and services is higher than the tax paid during the sale of goods and services to another entity.

Excessive tax deduction is often an impulse for tax authorities to launch investigation of a tax paying entity, Tyden.cz said.