The President of the Czech Republic signed the budget law that consolidates the reduced rates of 15% and 10% into a single reduced rate of 12%, effective January 1, 2024.
Consolidation of reduced VAT rates
Alongside this consolidation, the legislation entails the elimination of 22 tax exemptions, the imposition of restrictions on employee benefit deductions, and adjustments to excise taxes and taxes related to gambling activities. The standard VAT rate will remain steady at 21%.
Supplies subject to the 21% standard rate include:
- Alcohol
- Draft beer
- Services like hairdressing
Supplies moving to the new 12% VAT rate include:
- Essential foods
- Printed magazines and journals
- Newspapers
- Medicines
- Housing
Books, currently taxed at 10%, will be exempt from VAT.
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