• Service: Tax, Global Indirect Tax, Global Compliance Management Services, International Tax
  • Type: Regulatory update
  • Date: 5/21/2014

Czech Republic - VAT rates in 2015 

May 21: The Ministry of Finance issued a statement to clarify that a new “reduced” value added tax (VAT) rate of 10% for certain types of goods, was a draft and not yet approved.

The Ministry of Finance stated that, in accordance with the coalition agreement, the reduced VAT rate (10%) is not to apply to medical supplies and printed media, but only to pharmaceuticals, books, and essential baby nutrition. The new rate could be effective as early as 2015.

In addition, the Ministry confirmed that it has no plans to change the existing “reduced” VAT rate (15%) or the basic VAT rate (21%). In particular, food, water and sewerage services, heat and other items are to be subject to the same VAT rates as today.

Read a May 2014 report prepared by the KPMG member firm in the Czech Republic: Financial Update (May 2014)

Also included in this KPMG report are discussions of the following topics:

  • The General Financial Directorate on the definition of “the same activity” for the purposes of assuming tax losses
  • Payments made from equity under new rules
  • Notification duty relating to cash pooling transactions
  • The Supreme Administrative Court: compensation for damage versus payment made in exchange for delivery
  • The Czech international hiring-out of labour concept before the Court of Justice of the EU

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