Changes to VAT

Two VAT rates are introduced: the basic rate of 21% and the reduced rate of 12%. The 10% rate has been abolished.

The percentage of VAT levied will change in respect of drinks, books, magazines and periodicals; the changes will also affect transportation, health care, diagnostics and the liquidation of waste. The VAT changes will also impact the importation of works of art, collectibles and antiquities, supplies of firewood, domestic scheduled air transport, delivery of cut flowers and decorative foliage.

A limitation of the right to a deduction in respect of "passenger cars" has been introduced, setting the limit of the amount of input VAT that can be applied to the acquisition of a passenger car that is a fixed asset at CZK 420,000; this limit includes any technical improvements made. The limitation does not apply to taxpayers who acquire passenger cars for the purpose of resale.