After weeks of debate, the Czech government has proposed a series of measures aimed at achieving budgetary balance and reducing inflation.

These measures include changes to VAT, and in particular to the rates applicable. Two rates are due to be introduced in 2024:

  • Standard rate: 21%
  • Reduced rate: 12%

    In detail, the 12% rate will result from the merger of the two reduced rates (10% and 15%) and will mainly concern:
  • foodstuffs;
  • magazines;
  • buildings for residential housing;
  • and pharmaceutical products.

At the same time, certain items currently taxed at 10% or 15% will be reclassified as supplies subject to the standard rate (21%). These include

  • hairdressing and barbering services;
  • draught beer;
  • author and art services;
  • the collection, transport and storage of municipal waste;
  • repairs to shoes, leather goods and bicycles;
  • cleaning services;
  • firewood and newspapers.

Books will be exempt from VAT with the right to deduct.

These changes will come into force on 1 January 2024.

For more information, please contact our tax experts