Can the new self-billing provisions change the rights and obligations of the supplier?

With effect from 1 January 2025, an amendment to the VAT Act revised the provisions concerning the issue of tax documents by a person other than the supplier. The general rules for the issuance of invoices by another person and, in particular, the customer are based on the Council Directive 2006/112/EC on the common system of value added tax (the Directive).

By the end of 2024, the Czech Republic had fully implemented the provisions of Article 224 of the Directive, which allows Member States to require a document to be issued “in the name and on behalf of” the taxable person supplying the goods or services. Thanks to this implementation, written authorisation became mandatory, and the rights and obligations were clearly defined – i.e. the supplier was always considered the issuer of the invoice. However, as of the beginning of this year, the amendment omits the requirement for written authorisation, as the legislator considered it redundant in relation to the general rules of the Directive concerning the issuance of a document by another person. According to the new provisions, the tax document may be issued by:

“…another person on behalf of the taxable person on the basis of their arrangement; to that extent, the relevant other person has the same rights and obligations as the taxable person. The tax administrator may require the other person to prove the existence of such an arrangement.”

The practical implications are still unclear

What is the practical impact of the amendment? The effects depend on the agreement between the parties. The form of such an agreement is not strictly defined by law, but the tax office may verify its existence and contents if necessary.

However, tax experts are still inclined to the interpretation that if the arrangement between the supplier and the customer does not include an authorisation to issue tax documents, the customer should be regarded as the actual issuer in this case. This would also determine their responsibility for the correctness of the document and the obligation to declare the correct amount of tax. The Coordination Committee’s proposal on the topic has already been discussed and presented by the VAT expert panel, and its conclusions should be discussed with the representatives of the General Financial Directorate (GFD) next month. The conclusions of the GFD will confirm whether the amendment has an impact on rights and obligations in the relevant situations, providing guidance on the consequences and recommendations to be drawn from it.

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