The Tax office is allowed to keep only the problematic portion of the excess VAT deduction

The Constitutional Court of the Czech Republic published its decision – ruling Nr. II ÚS 819/18 on 28 February 2019. According to this decision is illegal, if the tax office keeps the unquestionable portion of the excess VAT deduction for a long time (e.g. for the entire duration of the tax verification proceedings or the tax audit). According to the Court, the tax office should divide the excess VAT deduction under review into the problematic portion and the unquestionable portion. The unquestionable portion of the excess VAT deduction should be refunded to the company as soon as possible.

https://www.usoud.cz/aktualne/zadrzovani-nesporne-castky-nadmerneho-odpoctu-dph-je-porusenim-vlastnickeho-prava/

Should you have any question please contact the tax team o LTA.