Additional VAT assessment from inventory shortfall

The Supreme Administrative Court recently issued a judgment in the matter of additional value added tax assessment from stock inventory shortfall.

The Supreme Administrative Court has confirmed the correctness of the decision of the Financial Office for the Zlín region, which assessed an additional VAT for the tax subject based on the performed tax audit for the taxable period of December 2010 and December 2011, this being an output tax from the shortfall posted based on the performed inventory taking as of 31 December 2010 and 31 December 2011.

The reason for additional VAT assessment from the shortfall was that the taxpayer was not able to prove the shortage rate in retail and wholesale, in which it enterprises, by an internal guideline. The taxpayer provided an internal guideline to the tax administrator, which stated natural shrinkage and shortage rate in retail. Based on his own investigation, though, the tax administrator found out, though, that the taxpayer also operates wholesale.

Based on this finding, the tax administrator raised a question as to the percentage of stocktaking differences in retail and wholesale, which the taxpayer was unable to substantiate, though. For this reason, the Supreme Administrative Court identified with the conclusion of the tax administrator and noted that the taxpayer was not able to sustain his burden of proof relating to the substantiation of facts explaining exemption of the declared shortfall from taxation.

Šárka Veselá