Administration of Value Added Tax in the Czech Republic and the Federal Republic of Germany Follow-up Audit Report

Report ID: 345

VAT is an audit area which is very suitable for tax audit cooperation because it is the only tax harmonised within the EU. The Supreme Audit Office of the Czech Republic (hereinafter “Czech SAI”) and the Federal Court of Auditors – Bundesrechnungshof (hereinafter “German SAI”) conducted a first ever parallel audit in the field of VAT in 2006. The report was published in 2008 (The report si also published in the catalogue at https://intosai-cooperativeaudits.org/catalog/report/report-on-the-results-of-the-parallel-audit-of-the-administration-of-value-added-tax-in-the-czech-republic-and-in-the-federal-republic-of-germany).

The follow-up audit of the administration of VAT in the Czech Republic and in Germany was carried out on the basis of an agreement between the two SAIs. During previous parallel audits, suspicious cases of intra-Community transactions were detected. Some of them merited further review. On the basis of audit findings the two SAIs produced recommendations on VAT management.

The follow-up audit was conducted to evaluate the action taken in response to these recommendations and to review the suspicious cases selected. In addition, the two SAIs decided to examine the following matters in their parallel audit mission:

• review of selected cases of intra-Community transactions between taxpayers from the Czech Republic and Germany that were not resolved during the previous parallel audit,

• review of selected cases of intra-Community transactions between taxpayers from the Czech Republic and Germany that were classified as high-risk cases,

• audit of the tax administrations’ procedure in the field of international assistance for the recovery of VAT claims,

• VAT audits of large companies.

The cooperation of the two SAIs within the parallel audits of the administration of VAT achieved the objectives set by the German and Czech SAI. The two SAIs developed a deeper understanding of the applicable systems in the Czech Republic and Germany in the fields of:

• intra-Community transactions

• risk management of VAT, especially concerning the selection of risk prone transactions

, • recovery of VAT claims, and

• VAT audits of large tax entities.

Due to mutual cooperation, differences of strategies to detect VAT fraud cases and in the above mentioned areas of VAT administration in the Czech Republic and Germany were revealed. Audit findings were compared and on their basis best practices were identified. Furthermore, the SAIs hope that the results achieved may encourage stakeholders to enter into discussions about approaches and strategies within and among Member States as well as with the EU Commission.

Source: https://www.nku.cz/assets/publications-documents/other-publications/paralelni-kontroly-spravy-dph-cr-srn-2010.pdf

Bericht über die von NKÚ und BRH durchgeführte koordinierte Prüfung der MwSt. im Rahmen der Mini-One-Stop-Shop-Regelung

Report ID: 346

Die Obersten Rechnungskontrollbehörden (ORKB) der Tschechischen Republik und der Bundesrepublik Deutschland arbeiten bereits seit vielen Jahren erfolgreich auf dem Gebiet der Umsatzsteuer zusammen und haben auch zwei koordinierte Prüfungen durchgeführt. Die beiden ORKBn beschlossen, sich erstmals mit dem Thema E-Commerce und Umsatzsteuer zu befassen, wobei sie aktuelle wirtschaftliche Entwicklungen aufgriffen und eine gemeinsame Prüfung durchführten. Prüfungsgegenstand war die Besteuerung von digitalen Dienstleistungen, die von EU-Unternehmen an private Verbraucher in der Europäischen Union erbracht werden. Die Prüfung umfasste den Zeitraum vom 1. Januar 2015 bis zum 30. Juni 2017.

Ziel der Prüfung war es, zu untersuchen:

- wie die Steuerbehörden der beiden Länder ihrer EU-Verpflichtung zur Umsetzung des MOSS nachgekommen sind;

  - aufkommende Schwierigkeiten bei der Umsetzung; und

 - inwieweit das MOSS-System geeignet ist, die Erhebung der Umsatzsteuer sicherzustellen. Beide ORKBn fassten ihre Erkenntnisse in nationalen Berichten zusammen und verfassten auf dieser Grundlage den gemeinsamen Bericht.

Bericht auf Englisch: https://intosai-cooperativeaudits.org/catalog/report/report-on-the-coordinated-audit-carried-out-by-nk-and-brh-on-vat-under-the-mini-one-stop-shop-scheme

Quelle: https://www.nku.cz/assets/publications-documents/other-publications/joint-report-vat-under-moss-scheme-2019-de.pdf

Report on the Coordinated Audit of Tax Subsidies

Report ID: 395

The VI EUROSAI Congress held in Bonn from 30 May to 2 June 2005 dealt with the audit of public revenues by Supreme Audit Institutions (SAIs).The analysis of the country papers submitted by EUROSAI’s members prior to the congress showed, among others,  that there was still  insufficient knowledge about the effectiveness of tax subsidies, noted the extent and complexity of tax legislation that can lead to tax shortfalls and tax exceptions and concluded that SAIs should develop more reliable findings about the volume and target achievement of such tax subsidies.

The Congress therefore advocated conducting a coordinated audit of tax subsidies that was open to all EUROSAI members. For that purpose, a Working Group was set up to coordinate the planning of the audit and to establish the contents and headings of it.

The Supreme Audit Institutions of Germany, Cyprus, Denmark, France, Finland, Hungary, Iceland, Italy, Latvia, Lithuania, Poland, Romania, Russian Federation, Sweden, Switzerland, Slovak Republic, United Kingdom and Netherlands (observer) participated in the audit.

The objectives of the coordinated audit were:

• Enhancing the sharing of knowledge,
• Enhancing communication between EUROSAI Members in areas of special interest,
• Obtaining best practice information,
• Strengthening informal networks,
• Improving cooperation with academic/research institutes

To obtain comparable results, a checklist was drafted that addressed all stages of a tax subsidy from legislation via implementation up to reporting. At the same time, this checklist formed the non-binding framework for an audit of transparency and reporting. Furthermore, three Working Sub-Groups were set up to deal with specific tax subsidies: Corporate Income Tax , Value Added Tax and Transparency and Subsidy Report.

After completing audit work, the Working Group came to the conclusion that, concerning tax subsidies, improvements were needed in the fields of legislation, evaluation and reporting in all participant states in order to create the overall transparency which it considered necessary both for the legislator and the general public.

Source: https://www.eurosai.org/en/working-groups/historic-working-groups-committees/coordinated-audit-on-tax-subsidies-working-group/index.html

Informe de la auditoría coordinada de las subvenciones fiscales

Report ID: 396

El VI Congreso de EUROSAI, celebrado en Bonn del 30 de mayo al 2 de junio de 2005, trató sobre la fiscalización de los ingresos públicos por parte de las Entidades Fiscalizadoras Superiores (EFS). El análisis de las ponencias de los países presentadas por los miembros de EUROSAI antes del congreso puso de manifiesto, entre otras cosas, que todavía no se conocía suficientemente la eficacia de las subvenciones fiscales, señaló la amplitud y la complejidad de la legislación fiscal que puede dar lugar a carencias y excepciones fiscales y concluyó que las EFS deberían elaborar resultados más fiables sobre el volumen y el cumplimiento de los objetivos de dichas subvenciones fiscales.

Por ello, el Congreso abogó por la realización de una auditoría coordinada de las subvenciones fiscales abierta a todos los miembros de EUROSAI. A tal efecto, se creó un Grupo de Trabajo para coordinar la planificación de la fiscalización y establecer los contenidos y epígrafes de la misma. Participaron en la fiscalización las Entidades Fiscalizadoras Superiores de Alemania, Chipre, Dinamarca, Francia, Finlandia, Hungría, Islandia, Italia, Letonia, Lituania, Polonia, Rumanía, Federación Rusa, Suecia, Suiza, República Eslovaca, Reino Unido y Países Bajos (observador).

Los objetivos de la auditoría coordinada fueron:
- Mejorar el intercambio de conocimientos,
- Mejorar la comunicación entre los miembros de EUROSAI en áreas de especial interés,
- Obtener información sobre las mejores prácticas,
- Fortalecer las redes informales,
- Mejorar la cooperación con los institutos académicos/de investigación

Para obtener resultados comparables, se elaboró una lista de cotejo que abordaba todas las fases de una subvención fiscal, desde la legislación hasta la presentación de informes, pasando por la ejecución. Al mismo tiempo, esta lista de cotejo constituyó el marco no vinculante para una auditoría de transparencia e información. Además, se crearon tres sub grupos de trabajo para tratar subvenciones fiscales específicas: Impuesto de Sociedades, Impuesto sobre el Valor Añadido e Informe de Transparencia y Subvenciones.

Una vez concluida la labor de auditoría, el Grupo de Trabajo llegó a la conclusión de que, en lo que respecta a las subvenciones fiscales, era necesario introducir mejoras en los ámbitos de la legislación, la evaluación y la presentación de informes en todos los países participantes, a fin de crear la transparencia  necesaria tanto para el legislador como para el público en general.

Fuente:https://www.eurosai.org/handle404?exporturi=/export/sites/eurosai/.content/documents/working-groups/COORDINATED_TAX_REPORT_ES.pdf

Joint Report on the Results of Parallel Audits of Excise Duty Administration in the Slovak Republic and in the Czech Republic (in Czech)

Report ID: 404

Legislation in the Czech Republic and in Slovakia on excise duty and its administration complies with EU legislation and exceeds EU requirements substantially. Differences have been discovered between Slovak and Czech excise duty regulations: in the Czech Republic, verification of the economic stability of applicants for permits and mandatory labelling and dyeing of several mineral and some other oils contribute to effective excise duty administration; in Slovakia, the distribution of excise stamps is simpler than in the Czech Republic and less of a burden on excise duty administrators. In the fight against excise duty evasion, supervising the movement of raw tobacco or tobacco materials, the implementation of the institute of a transport fuel distributor, and keeping a registry of merchants of consumer packaged alcohol appear to be a good practice in the fight against excise duty evasion. Excise duty revenues in the Czech Republic and in Slovakia grow more slowly than other tax revenues

In August 2015, The Supreme Audit Institutions of  Czech Republic and Slovakia agreed to conduct parallel audits aimed primarily at excise duty administration an signed an Agreement for this purpose. The topic of the parallel audits was chosen because both EU Member States follow common European legislation on this matter, thereby providing an opportunity to ascertain how European legislation is applied on a national level, how the excise duty administration system is set up, and how the system in Slovakia and the system in the Czech Republic differ.

The audit questions on which the parallel audits were based were agreed jointly. The parallel audits aimed to compare the performance of the excise duty administrators while taking into account qualitative and quantitative indicators and identifying weaknesses in the excise duty administration process. Answers to the following audit questions in particular should have been sought:

- Have excise duty administrators in the Czech Republic and Slovakia been attaining comparable values of qualitative indicators while incurring comparable costs?

- Has implementation of the EMCS1 resulted in more effective excise duty administration and has been spending on its implementation effective?

- The joint final report on the audit results was drawn up in accordance with ISSAI 300 - Fundamental Principles of Performance Auditing

Source: https://www.nku.cz/assets/publikace-a-dokumenty/ostatni-publikace/spolecna-zprava-kontrola-spotrebni-dane-cr-sr_cz.pdf

English report: https://intosai-cooperativeaudits.org/catalog/report/joint-report-on-the-results-of-parallel-audits-of-excise-duty-administration-in-the-slovak-republic-and-in-the-czech-republic