Unreliable VAT payer

VAT debt of at least half a million CZK, failure to comply with mandatory filing deadlines or involvement in suspicious business transactions. It is not only in these cases that an entrepreneur or a company can become an unreliable VAT payer. The VAT Act defines an unreliable taxpayer as a taxpayer who seriously fails to fulfil his/her obligations towards the tax authorities. The exact definition is in Section 106a of the VAT Act.
For the business partners of these unreliable taxpayers, trading with them is very risky. This is because if they take goods or services from an unreliable taxpayer, they are liable for the VAT themselves and the tax authority will recover it from them.