Investor Presentaiton
Value added tax (VAT)
The Czech Value Added Tax Act is based on the
general principles of EC Directive 2006/112 and
as such is very similar to other EU countries.
VAT is generally due on supplies of goods or
services, intra-community acquisitions of
goods and imports of goods with the place of
supply in the Czech Republic.
VAT rates
The standard VAT rate is 21 percent (effective
from 1 January 2013). The Czech Republic also
applies two reduced rates. The first reduced
rate of 15 percent applies to e.g. food products,
public transportation services, social housing
construction, and transfers of social housing,
unless these are tax-exempt. The second re-
duced rate of 10 percent (effective since 1 Jan-
uary 2015) applies to essential baby nutrition,
pharmaceuticals for human and veterinary pur
poses, books, mill products and their mixtures
for the production of foods for gluten-intoler-
ant individuals.
Exports and intra-community supplies of
goods, as well as the international transport of
goods relating to exports or imports of goods,
are zero-rated.
Certain supplies of goods and services are ex-
empt from VAT, for example:
insurance and financial services;
postal services;
education;
― health and welfare services;
― transfer and financial leasing of immovable
property under certain conditions;
- renting of immovable property (apart
from short-term leases, leases of parking
spaces and leases of safe deposit boxes).
VAT registration
VAT registration is obligatory for taxable per-
sons established in the Czech Republic whose
turnover for the preceding 12 consecutive
months exceeded CZK 1 million. Other situa-
tions may also lead to obligatory VAT registra-
tion (e.g. the purchase of a going concern from
a VAT payer, the transfer of the assets of a dis-
solved or spun-off VAT payer entity to ataxable
person).
A taxable person not established in the Czech
Republic becomes a Czech VAT payer if they
make a specific transaction with the place of
supply in the Czech Republic, such as a zero-
rated supply of goods to another EU member
state or a Czech local taxable supply (supply
of goods, provision of services) on which they
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