The Supreme Administrative Court (SAC) have recently been dealing with a case from the year 2009 where an entrepreneur – not a VAT taxable person – had surpassed the CZK 1 000 000 mark which decides about the subject’s registration for VAT. The entrepreneur had, however, not registered as a VAT taxable person. The Financial Administration had registered the subject in December 2013 with the registration being valid from January 1^st, 2013. But the SAC did not agree with this process.

The SAC reached the decision that the period of time reaching into the past for which subjects can be registered for VAT is restricted, as according to § 20 section 2 of the Tax Code. The SAC stated that it is unacceptable that the Financial Administration would be able to freely register entrepreneurs and businesses as VAT liable persons without any time restrictions because that could lead to absurd situations. They also noted state executive power which is limited in time is the basis of stability and security.