Czech Republic lows VAT rate

23.10.2014

 Czech Senate approved the Bill which provide for another VAT rate of 10%.

This VAT rate will be applicable for books, medicine and children food since the beginig of next year. Now there are two VAT rates in Czech Republic – 21% and 15%. Books, medicine and children food are taxed by the 21% rate.

Also, at the same meeting Senate confirmed the soon abolishment of such leveled system of VAT as well as confirmed the introduction of the single VAT rate of 17,5% since 2016.

If the President sings the Bill, it would become into force since the 1^st of January.

Source: http://www.senat.cz/xqw/xervlet/pssenat/hlasovani?action=steno&O=9&IS=5364&D=23.10.2014#b15306

Expert’s opinion

Incorporation of companies in Czech Republic is relatively simple process as to comparison of the same process in other European jurisdictions. It is also less costly than, for example, in the Netherlands or in Germany. We will be glad to consult you on this matter.

Bringing the VAT system in a consistent look and return to a single rate of VAT will allow foreign businessmen to have better understanding of the taxation of their business. Simplification and reduction of tax rates always attracts new business into the country

Ekaterina Myznikova ( Lawyer, HONEST & BRIGHT COMPANY)