- From 1 January 2027, the Czech VAT input deduction cap of CZK 420,000 for selected category M1 passenger cars used as fixed assets will be abolished.
- The full VAT deduction will again be available on the entire purchase price of a qualifying car, provided the normal input VAT conditions are met (especially use for taxable economic activity); mixed use still requires proportional deduction.
- The change does not allow retroactive extra deduction for cars first put into use between 2024 and 31 December 2026; the original capped deduction remains final for those vehicles.
- For cars that become fit for use only on or after 1 January 2027, the cap will not apply, even if an advance payment was made in 2026.
- If VAT on a 2026 advance was initially deducted only up to the cap, and the car is completed in 2027, the deduction can be increased via an additional VAT return for the period of the original deduction, filed by the end of January 2027.
Source: accace.cz
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.
