Changes to VAT Rates and Limits on Deductions in the Czech Republic

• VAT rates in the Czech Republic have been simplified, with a single reduced rate of 12% and a standard rate of 21%.
• Certain goods and services that were previously subject to reduced rates are now subject to the standard rate, while occasional public passenger bus transport is now subject to the reduced rate.
• Draft beer and other beverages, except tap water and milk, are now subject to the standard rate.
• Books, whether in hard copy or electronic form, are now VAT exempt.
• There is a limitation on the VAT deduction for passenger vehicles used for business purposes, with a maximum deductible VAT of CZK 420,000.
• The new rules do not apply to certain types of vehicles, such as ambulances and funeral vehicles.

Source: bdo.global

Note that this post was (partially) written with the help of AI. It is always useful to review the original source material, and where needed to obtain (local) advice from a specialist.

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