May tax administrator request information about movement of vehicles from traffic cameras?
The Supreme Administrative Court (SAC) has confirmed that tax administrators may for tax purposes request from the Police of the Czech Republic information on the movement of particular motor vehicles processed within the automatic vehicle detection system (Automatická kontrola vozidel, AKV).
A taxpayer claimed a VAT deduction on the acquisition of a car for business purposes, resulting in an excess deduction. The taxpayer supported the acquisition of the car with a tax document stating the date of the taxable supply. The tax administrator initiated a procedure to remove doubts as to the lawfulness of the claimed right to deduct, challenging the car being used for economic activity.
The tax administrator requested the Police of the Czech Republic to provide them with information on the movement of a motor vehicle with a specific license plate number from the automatic vehicle detection system; the aim was to compare these data against the records in the logbook by which the taxpayer supported the use of the car for economic purposes. The automatic vehicle detection system records information on vehicles’ license plate numbers together with data on the time and place of recording the number. These data are meant to help the police fulfil their tasks as defined in the Police Act, such as ensuring public order, searching for persons and objects, and detecting and investigating criminal activities.
The SAC dealt with the legitimacy of the tax administrator's request to obtain records on the movement of a vehicle based on its license plate number kept by the Police of the Czech Republic. Generally, tax administrators may request from persons and public authorities records that are necessary for tax administration. In the present case, the court concluded that the data on the movement of the vehicle were necessary for assessing whether the taxpayer had used the car for economic activity and was therefore entitled to deduct value added tax.
According to the court, the tax administrator had requested the records lawfully, and the Police of the Czech Republic had been obliged to provide such data. Since the police had obtained the records on the movement of the taxpayer's vehicle within the defined scope of their activity and had provided them to the tax administrator for the purpose of using them in tax administration, the SAC did not accept the objection that the records were only obtained upon the tax administrator’s request for the purposes of tax administration and therefore contrary to the scope of competences as defined by the Police Act.