Full VAT Deduction for M1 Passenger Cars Expected from 2026 as Cap Set to End

The cap on input VAT deduction for category M1 passenger cars (currently CZK 420,000) is expected to be lifted at the end of 2026.
Full VAT deduction, including for higher-end vehicles, is likely to return after an amendment to the VAT Act in 2026.
Income tax rules remain unchanged: depreciation and lease payments are tax-deductible only up to CZK 2 million.
Businesses should reconsider the timing of fleet investments, as lifting the VAT cap could lead to significant savings.

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.