Key Changes to VAT Effective from January 1, 2025: A Comprehensive Overview

The blog provides an overview of the upcoming changes to value-added tax (VAT) in the Czech Republic, including changes to VAT turnover calculations, reverse charge application, time limits for claiming deductions and correcting the tax base, and modifications to real estate taxation, effective from January 1, 2025.

• Changes to VAT turnover calculation: The turnover period will be calculated from January 1 to December 31 of a given year. Entities with turnover between CZK 2,000,000 and CZK 2,536,500 will become VAT payers from the following year, while those exceeding CZK 2,536,500 will become liable from the second day after reaching the new limit.
• Expansion of reverse charge: The reverse charge mechanism will now apply to certain cleaning services, including general building and industrial cleaning.
• Reduced time limit for claiming deductions: The time limit for claiming VAT deductions will be reduced from 3 years to 2 consecutive calendar years.
• Extended time limit for correcting the tax base: The time limit for correcting the tax base will be extended from 3 to 7 years, and will not be interrupted by legal proceedings.
• Refund of tax deductions on outstanding liabilities: A new obligation to refund tax deductions after 6 months from the due date of the liabilities.
• Potential changes to car deduction limit: The CZK 2,000,000 car deduction limit may be changed or abolished in 2027.
• Simplification of real estate rules: The 5-year time limit for claiming the exemption on the supply of immovable property is abolished, and the limit for a substantial change is reduced from 50% to 30% of the property’s value.

Source: pkfapogeo.cz

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.

---

---