- New guidelines on the application of value added tax (VAT) changes in the Czech Republic from 2024
- VAT deduction for passenger cars with a purchase price of over CZK 2 million is limited to CZK 420,000
- The deduction limit is reduced if the deduction is claimed on a proportionate basis
- Vehicles that have received an advance payment or undergone technical improvements before the end of 2023 are not subject to the deduction limitation
- The limitation does not apply to vehicles that are not part of the taxpayer’s fixed assets
- If a vehicle is later classified as a fixed asset, the taxpayer must reduce the VAT deduction in the VAT return
- Sale of a vehicle with limited VAT deduction does not allow adjustment of the deduction above the limit
- Exception for taxpayers acquiring vehicles for finance lease arrangements, but not for operating lease arrangements
- The guidelines do not address the interpretation of the law for demo cars classified as tangible fixed assets by car dealers.
Source: kpmg.com
Note that this post was (partially) written with the help of AI. It is always useful to review the original source material, and where needed to obtain (local) advice from a specialist.
