Understanding the New VAT Rates in Czechia

Significant change is the upcoming adjustment of VAT rates in Czechia, a move that will consolidate the current three-tier VAT system into two rates.

In the dynamic world of global commerce, it's crucial to stay abreast of fiscal changes. One such significant shift is the upcoming adjustment of VAT rates in Czechia, a move that will streamline the current three-tier VAT system into two rates.


Under this new plan, the higher VAT rate of 21% remains unchanged. However, the reduced rate will decrease to 12%, effectively eliminating the existing 10% and 15% VAT brackets.

These revised VAT rates will have diverse impacts across various sectors. For instance, certain goods and services will transition from the lowest to the highest VAT bracket, leading to a price increase. Conversely, some sectors that have seen significant price hikes in the past year will benefit from the lower VAT rate, dropping from 15% to 12%.


Beyond VAT, the fiscal reform will also reshape the broader tax landscape in Czechia. The elimination of 22 tax exemptions and the introduction of other tax adjustments will result in an increased tax burden for many individuals, either directly or indirectly.


From 2025, corporate income tax will rise from 19% to 21%. Property taxes will also see a substantial increase across all levels. Additionally, excise duties on certain goods and activities will face a gradual increase over the next few years.

The removal of 22 tax exemptions will impact various areas, leading to changes in the overall tax structure. These changes will affect a wide range of sectors, from education to employee benefits.


At Space Invoices, we're committed to helping businesses navigate these changes.


Stay tuned for more updates and resources to help you understand and adapt to these new fiscal regulations.

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