Czech VAT rate to increase 1% to 21% in 2013

Mon 2nd Apr 2012

It has been proposed that the Czech Republic raises its VAT rate from 20% to 21% from the 1 January 2013.

Updated 27 December 2012 – the President has now approved this change, and it will go into place on 1 January 2013.

This follows a previous Czech 1% VAT increase in 2010.

It was originally proposed in 2011 that the standard and reduced VAT rates (currently 14%) would be brought into line at 17%.  This would include a widening of the tax base to help fund the cut to the higher, standard rate.  However, this has now been dropped.

The Czech government is struggling to keep its deficit close to the Euro currency entry level of 3% of GDP.  It has been hit by the slow down across its crucial Western Europe markets.