Proposed Changes
Under the proposal, the reduced VAT rate would be set at either 13% or 14%, and the standard VAT rate of 21% would be maintained. This would mean that goods and services currently subject to the 10% and 15% reduced rates would be subject to the new single reduced rate.
Implementation Timeline
Subject to approval, the change to a single reduced VAT rate would take effect from 1 January 2024. This would give businesses sufficient time to adjust to the new system and make necessary changes to their accounting and invoicing procedures.
Impact on Businesses
The consolidation of the reduced VAT rates is expected to impact businesses in the Czech Republic positively. It will simplify the VAT system and make it easier for businesses to comply with the regulations, reducing administrative burdens and allowing them to focus on their core activities. The single reduced rate will make it easier for businesses to calculate and charge the correct VAT on their goods and services.
