Should I sue for the amount with or without VAT? There is a simple rule for it.
With or without VAT?
The claimant is a VAT payer. It sues the other party for payment of a monetary sum. Can he successfully claim VAT on the defendant's supply?
The answer is yes, it can. However, it can only do so if the benefit awarded by the court is subject to the tax.
If, for example, the plaintiff (VAT payer) sues the other party for lost profits, the court will not award the requested part of the benefit corresponding to VAT. Bude-li se žalobou úspěšný, nepřizná mu soud „zisk“ v pravém slova smyslu. Lost profits are a form of compensation for damages, and these are not taxable under section 2(1) of the Czech VAT Act and therefore not taxable supplies within the meaning of that Law.
If the court dismisses the action in part because of the incorrectly added VAT, the plaintiff will only be partially successful. This may also result in reduced costs, which will make the litigation more expensive for the claimant. The costs of the proceedings are generally borne by the parties according to their relative success in the dispute.
And when to sue "including VAT"?
When, on the other hand, could the VAT claimant add VAT to the amount claimed and thus sue for the performance including VAT? For example, if the claim was for performance under a contract of sale - payment of the agreed purchase price, and if the goods were subject to VAT.
(according to Czech Supreme Court case law: 29 Cdo 3321/2020)
