Plans to introduce a Digital Services Tax (DST) in the Czech Republic are back on the agenda after a long pause.1 On 12 May 2021, the Bill covering the new tax passed its second reading in the Chamber of Deputies, bringing it one step closer to coming into effect.
The Czech digital tax bill has experienced challenges in development since its inception and the basic parameters of the new tax are still not clear. For example, members of Parliament are debating what tax rate should apply and discussing a rate ranging from 2% to 7%. The current consensus appears to be that a 5% rate should apply, but the adoption of a variety of different rates for different types of services cannot be ruled out completely at this stage.
It is also not clear when the new tax will enter into force (if passed). The start date was originally expected in mid-2020, then at the beginning of 2021 and now there is discussion of a possible entry into force date of 1 July 2021. However, there is also discussion of 1 January 2022 as the possible entry into force date.
Source EY
See also Taxation of the Digital Economy in Europe
Latest Posts in "Czech Republic"
- ECJ Upholds Czech Joint VAT Liability in Fuel Fraud Case, Validates EU Law Compliance
- Obligation to Correct VAT Deductions on Unpaid Invoices Effective January 2025
- Czech Republic Enacts New VAT Rules for Unpaid Invoices Starting January 2025
- Czech Small Businesses Gain Flexibility with Quarterly VAT Returns Starting 2025
- Reminder: Submit 2024 EU VAT Refund Applications by September 30, 2025 Deadline
