KSB reports that it has achieved “another success” in its representation of Czech Radio in a long-lasting dispute with the Board of the Financial Directorate on the issue of the right to deduct VAT.
According to KSB, "an important point of contention was whether license fees are in fact a payment for public service broadcasting …. The European Court of Justice (ECJ), on the initiative of the Supreme Administrative Court, expressed the view in its decision that license fees are not deemed to be consideration paid for public broadcasting, and therefore fall outside the scope of the directive on VAT."
The ECJ held that, even though Czech Radio is in a "triangular legal relationship" between the Czech state (which instructs Czech Radio to perform tasks in the public interest consisting in the provision of public service broadcasting), and recipients of services (which are required by the Czech state to pay a mandatory fee set by law), there is no direct link between the public broadcasting service of Czech Radio and the fee.
According to the ECJ decision, which will now be mandatory for Czech courts, such simply stated revenue from license fees should not be included in the coefficient for reducing VAT deduction.