Final Word from Friday, June 6, 2003

Small Czech investors who want a few gold coins can slip across the border into Austria or Germany and, illegally but with little risk, bring a couple back without paying VAT. On several occasions, people have been caught trying to smuggle large quantities of gold into the CR, but not everyone gets caught. According to Hospodařské noviny, there seems to be a real scam going on: Tons of gold have been smuggled into the country and then officially exported, qualifying for a VAT rebate. The state, HN said, might have lost Kč 360m on this last year and another Kč 68m in the first four months of this year. In contrast, VAT receipts from legal sales of gold bullion are negligible. Why, then, hasn't the CR gone the route of Austria and Germany and eliminated the VAT on gold? A cynic would say it's because someone is making a fortune on VAT fraud.


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