Following the new EU VAT directive, the Czech government has introduced a second reduced VAT rate of 10% to be implemented by …
Following the new EU VAT directive, the Czech government has introduced a second reduced VAT rate of 10% to be implemented by January 2015. The new reduced VAT rate will apply to medicines, pharmaceuticals, e-books and baby food products.
Under the new EU VAT directive, member states are permitted two reduced VAT rates. The current reduced VAT rate is 15%. The standard rate of VAT rose 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.
Alongside the 10% reduced rate proposal there was 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.