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  • Service: Tax, International Corporate Tax, Global Indirect Tax, International Executive Services, Global Compliance Management Services
  • Type: Regulatory update
  • Date: 8/21/2012

Czech Republic - Proposed VAT rate increase (1%) in 2013 

August 21: The Chamber of Deputies approved changes to the value added tax (VAT) law—measures that are proposed to be effective beginning 1 January 2013.

The Chamber of Deputies passed the bill in the third reading, thus sending the legislation to the Senate for its consideration. Among the VAT-related provisions are measures that would:


  • Increase the VAT rate by 1% (to 15% and 21%) effective 1 January 2013
  • Affect the method of calculating the VAT base and the amount of tax
  • Amend the rules / categories for goods subject to the reduced VAT rate

Other provisions in the pending legislation would:


  • Expand liability for VAT payments to customers when suppliers do not remit VAT
  • Extend the time for real estate transfers to be exempt from VAT, to five years (from three years)
  • Provide for monthly VAT “tax periods”
  • Provide for electronic VAT documents and require returns in electronic format only

In addition, the amendment would significantly modify the definition of insurance and reinsurance activities that are exempt from VAT.


Read an August 2012 report [PDF 304 KB] prepared by the KPMG member firm in the Czech Republic: Financial Update (August 2012)


Other developments in the Czech Republic discussed in the August 2012 report concern:


  • Amendments to individual income tax measures, some of which would be permanent and other temporary
  • Proposals for supplementary pension insurance and related measures
  • A proposal for an earlier effective date for provisions relating to loan receivables
  • VAT “deregistration” in Slovakia for delinquent taxpayers
  • Effective date of 1 January 2013 for a new income tax treaty between the Czech Republic and Poland



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