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Czech Republic – VAT on fuel

By May 25, 2022No Comments

Please note that the below article is a correction to a previously published news in the IVA weekly newsletter. 

Source of the previous article: https://english.radio.cz/economist-cutting-vat-fuels-will-only-stimulate-demand-and-help-finance-russias-8747078

There is a confusion in the Indirect taxes in the Article. VAT is not to be decreased by any fixed number of Czech Crowns per litre. VAT is always a percentage of the final price for the end-user. The decrease or increase of VAT does not affect the producers, transport companies, etc. since VAT is fully recoverable on fuels for all fully taxable VAT payers. The decrease or increase only concerns the general public and health care providers that cannot recover the input VAT.

The discussed decrease is concerning the Excise Tax. The Excise Tax is based on EU Law “It is appropriate to specify the excise goods to which this Directive applies and to refer for that purpose to Council Directives 92/83/EEC (4), 92/84/EEC (5), 2003/96/EC (6) and 2011/64/EU (7).” COUNCIL DIRECTIVE (EU) 2020/262 of 19 December 2019 laying down the general arrangements for excise duty (recast) will become partly effective on 13 February 2023.

More on Czech Excise Tax taxation here: https://www.mfcr.cz/cs/aktualne/tiskove-zpravy/2022/vlada-schvalila-snizeni-spotrebni-dane-z-47148

The decrease of the excise tax by CZK 1.50 per litre of petrol and diesel will be valid from 1 June to 30 September 2022. The amendment to the Excise Tax Act will be published in the Collection of law of the Czech Republic.

The above information was kindly provided by Jan Kaucký VAT s.r.o. (Czech Republic). If you have any questions, please feel free to contact Jan at: jan.kaucky@outlook.com.