Carousel fraud in fuel and its solution from the viewpoint of the Czech VAT Act

Abstract

The paper deals with the problem of carousel fraud on value added tax. The author focuses on the concept of the Czech Value added tax Act, which has been amended since the year 2011. One of the main motivations is to tackle fraud in the fuel market. The unsuccessful application in the year 2010 to introduce a reverse charge for this problematic commodity triggered the development of other tax and non-tax instruments. The paper mentions liability for unpaid tax and related conditions for special tax securement. Special attention has been given to fuel distribution. Registration of fuel distributors is one of non-tax instruments that reduced the market to one-tenth in a very short time.