The Government approved the private members’ bill amending the Act on Sole Proprietorship and the Act on Fuel (živnostenský zákon a zákon o pohonných hmotách). The Bill should more strictly regulate conditions under which a legal entity is allowed to trade with fuel. The aim of the Bill is to prevent legal entities from malpractice of tax evasion. The General Financial Directorate estimates the amount of approximately 5 to 8 bln CZK of VAT and excessive tax evasion each year. The Bill introduces the duty of each legal entity intending to trade with fuel to deposit a security of the amount of 20 million CZK. The Bill also changes the nature of the proprietorship; newly, the concession is introduced for fuel trading.
On the one hand, the Bill creates new barriers to trade. On the other hand, it aims at efficient tax collection and hinders tax evasion and malpractice.
The Bill should come into force in the next month after being promulgated. The Bill is heading to the Chamber of Deputies.
For further information, click here (explanatory report).
12th October 2020