Czech Vat rate
New Czech Vat rate
Under the new EU VAT directive, member states are permitted two reduced VAT rates. Following this, the Czech government has announced a second reduced VAT rate of 10% to be implemented by January 2015. The current reduced VAT rate is 15%. This new reduced VAT rate will apply to medicines, pharmaceuticals, e-books and baby food products. The standard rate of VAT rose by 1%, to 21% in 2013 as the country tried to control its government deficit.
This third 10% rate of VAT, has been estimated to cost the government nearly 3 billion Czech Krones. (Around £85.6k)
Originally there were also proposals for a 5% reduced rate and a Czech VAT rate simplification proposal (combining the standard rate of 21% with the 15% reduced rate to create a 17.5% VAT rate). However these proposals were dropped due to complications of managing government and company accounting systems.