Can the tax administrator use camera recordings to challenge the logbook?

The Police of the Czech Republic (hereinafter as "Police") has established the Central Automatic Vehicle Control (hereinafter as "CAVC") system on roads and highways, which continuously monitors traffic for the purpose of vehicle search and ensuring public order in transportation. Based on the license plate number, it is possible to retroactively determine the specific locations where a vehicle was present.

The tax administrator requested records of the movement of the selected vehicle from the Police as part of the tax proceedings when the VAT payer claimed the VAT deduction for the purchase of the car. The tax administrator had reasonable doubts about the accuracy of the records stated in the logbook (the first entry in the logbook preceded the date of vehicle acquisition). After obtaining the CAVC records from the Police and verifying them, the tax administrator discovered that the information in the logbook did not correspond to the actual movement of the vehicle. Consequently, it was concluded that the VAT payer did not prove fulfillment of the conditions for claiming the VAT deduction. The use of CAVC data by the tax administrator led to a legal dispute.

The Supreme Administrative Court (hereinafter as "SAC") addressed the question of whether the Police was authorized to process and provide CAVC records to the tax administrator for tax purposes in its decision 9 Afs 147/2020 - 34. SAC confirmed the correctness of the Police's and tax administrator's actions, stating that the tax administrator contacted the Police only after receiving the logbook, which appeared unreliable. According to SAC's decision, the tax administrator was entitled to request camera recordings of the vehicle's movement as they were necessary data for tax administration, and the Police is obliged to provide this information to the tax administrator. SAC did not agree with the VAT payer's complaint that the recordings were taken by the Police only after the tax administrator's request, as the Police already had them at the time of the request. In SAC's opinion, the recordings did not represent illegally obtained evidence.

However, the decision of SAC was overturned by the Constitutional Court's ruling (hereinafter as "CC") CC 2621/22 from 14 February 2023. CC acknowledged the logical objection of the VAT payer that the Police necessarily had to process the recordings based on the tax administrator's request, as they had to at least sort the recordings in the form required by the tax administrator and provide them. CC emphasized that the matter needs to be comprehensively assessed, considering all possible impacts on the constitutionally guaranteed rights of the individuals under control. Therefore, SAC must thoroughly address the VAT payer's objections, which, according to CC, did not happen. SAC will thus reconsider the matter of the tax administrator's use of CAVC recordings.

Authors:
Veronika Soukupová, Tax Senior
Radka Dubnová, Tax Manager