Czech Republic considers new reduced VAT rate

Thu 19th Dec 2013

The Czech coalition government is considering introducing a new, reduced VAT rate for medicines.

EU rules on reduced VAT rates

The EU VAT Directive permits two reduced VAT rates below any member state’s standard VAT rate.  These rates may not go below 5%.  Currently, the Czech Republic only has a single reduced VAT rate of 15% – the standard Czech VAT rate is 21%.

The proposed new reduced VAT rate would help offset the planned withdrawal of the patients’ health regulatory fees.  This would hit insurers.