Information from the general tax directorate on VAT rate changes from 1 January 2024
1. Introduction
With effect from 1 January 2024, in accordance with Act No. 349/2023 Coll., which amends certain laws in connection with the consolidation of public budgets, there are changes in tax rates. The basic tax rate remains at 21%. The second reduced tax rate of 10% is abolished and only one reduced tax rate of 12% is introduced instead of the first reduced tax rate of 15%. In Act No. 235/2004 Coll., on value added tax, as amended (hereinafter referred to as the "VAT Act"), Annexes No. 2a (List of services subject to the second reduced tax rate) and Annex No. 3a (List of goods subject to the second reduced tax rate). From 1 January 2024, payments are subject to a reduced rate taxes defined in Annex No. 2 (List of services subject to a reduced tax rate) and Annex No. 3 (List of goods subject to a reduced tax rate).
In addition to the change in the amount of the tax rate, the definition of transactions subject to a reduced tax rate from 1 January 2024 also underwent other adjustments, mainly as a result of shifts between tax rates or changes in the wording of the given code with an impact on the scope of items.
The aim of this information is to alert you to selected material changes in the area of tax rates. Please note that this is only an interpretation and interpretation aid. For the correct inclusion of the performance in the relevant tax rate, it is always necessary to proceed from the text of the legal regulation
2. SEVICES
In the area of services, Annex No. 2 to the VAT Act is being expanded and amended - the list of services subject to a reduced tax rate of 12%. The full wording of Annex No. 2 from 1 January 2024 is given in the annex to this information.
Please note that the reduced rate is subject to services that correspond to the numerical code of the CZ-CPA production classification and at the same time the explicitly stated verbal description of this code in the text part of the appendix.
Newly, in the explanations to Annex No. 2, reference is made to the Production Classification effective as of 1/1/2015. However, this is not a substantive change, as the definition of the services contained in Annex No. 2 according to the CZ-CPA production classification, as amended as of 1. 1. 2015, is a similar definition that corresponds to the numerical code of the CZ-CPA production classification, in the version valid as of 1. 1. 2008. The valid version of the updated Classification of Production (CZ-CPA), including explanations and a converter, is available on the website of the Czech Statistical Office office (www.czso.cz).
