Taxes · 14 March 2026 · 9 min read

Czech VAT rates 2026: 21%, 12% and exempt books

The VAT rates a Czech business charges in 2026: 21% standard, 12% reduced, and books exempt with the right to deduct. Plus when you must register.

The rates in force

Czechia charges a standard VAT rate of 21 % and a reduced rate of 12 % in 2026. VAT is DPH in Czech — daň z přidané hodnoty. Books are not a separate "0 % rate": where the statutory conditions are met they are exempt with the right to deduct input VAT, which is a different thing. Hairdressing and barbering, shoe repairs and bicycle repairs all sit in the standard 21 % rate.

Rate / regime	What it covers	Examples
21 %	Standard rate — most goods and services	Electronics, clothing, cars, professional services, telecoms, alcohol and tobacco, hairdressing and barbering, shoe and bicycle repairs
12 %	Reduced rate — selected goods and services	Selected foodstuffs, medicines, water supply and sewerage, heat, accommodation, public transport, catering services (without most drinks) and construction work on housing
Exempt with the right to deduct	A separate regime, not a 0 % rate	Selected books, e-books and audiobooks where the statutory conditions are met

Two rates instead of three is the result of the consolidation package, which merged the former 10 % and 15 % reduced rates into a single 12 % rate. The change took effect on 1 January 2024 and still applies in 2026.

What the consolidation package changed

Until the end of 2023 there were three rates:

21 % — standard rate
15 % — first reduced rate
10 % — second reduced rate

The consolidation package (Act No. 349/2023 Coll.) brought a long list of changes, and merging the reduced rates was among the most visible. Some items that had been in a reduced rate moved up to 21 %, and a few new ones moved into the reduced rate.

The main moves

Up to the standard 21 % rate went, among others: non-alcoholic drinks (only tap water, milk, dairy drinks and plant-based drinks such as soy or oat drinks stay at 12 %), hairdressing, repairs of footwear and leather goods, bicycle repairs, domestic cleaning services, collection and transport of municipal waste, cut flowers and firewood
Staying in the reduced 12 % rate are, for example: selected foodstuffs, water supply and sewerage, public transport, accommodation, catering services with exceptions, medicinal products, selected medical devices, child car seats, and construction work on housing (details below)
Books, including selected e-books and audiobooks, are exempt with the right to deduct where the conditions are met — neither the 12 % rate nor a separate 0 % rate

What falls under 21 %

The standard rate applies to all goods and services for which the VAT Act does not expressly provide the reduced rate — that is, outside annexes 2 and 3, heat and cooling, and construction work on housing under § 49. That includes:

Electronics and consumer goods
Clothing and footwear
Cars and spare parts
Construction work on non-residential buildings (offices, shops, halls) and construction of new housing that is not social housing
Most professional services — legal, accounting, consulting, IT
Telecommunications
Alcoholic drinks and tobacco products
Non-alcoholic drinks (except milk, dairy and plant-based drinks) and bottled water
Cut flowers and firewood
Cosmetic services
Furniture
Motor fuel

If you are unsure which rate your product or service falls into, check the current annexes to the VAT Act or ask a tax adviser. The VAT calculator will do the arithmetic once you know the rate.

What falls under 12 %

The reduced rate covers the services in annex 2 and the goods in annex 3 to the VAT Act, supplies of heat and cooling (§ 47(3)) and construction work on housing (§ 49). The former annexes 2a and 3a were abolished together with the 10 % rate in 2024. These are largely items with a social, health or cultural dimension.

Goods at the reduced rate (annex 3)

Foodstuffs — including infant formula, milled products and bakery products. Drinks are not foodstuffs here: only tap water, milk, dairy drinks and plant-based drinks such as soy or oat drinks are at 12 %; other non-alcoholic drinks, including bottled water, are at 21 %
Medicinal products and selected medical devices — for example aids on prescription, glasses and contact lenses
Newspapers and magazines — where the conditions of the annex are met; books have their own exemption regime with the right to deduct
Child car seats
Live animals, seeds and plants normally used to prepare food, and live plants and seedlings (not cut flowers)

Services at the reduced rate (annex 2)

Water supply and sewerage — water delivered through the mains and waste water disposal
Accommodation — hotels, guest houses, campsites
Catering — restaurants and canteens; drinks served are at 21 %, except tap water, milk and dairy or plant-based drinks. From 1 January 2027 all non-alcoholic drinks served as part of a catering service move to 12 % (Act No. 180/2026 Coll.)
Public passenger transport — trains, buses, city transport, scheduled boats, ski lifts
Cultural events — entry to museums, exhibitions, zoos, theatres, cinemas, botanical gardens and national parks
Sport — entry to sports events, sports facilities, swimming pools and saunas
Social services and health care, where not exempt
Funeral services
Home care for children, the elderly, the sick and the disabled

Construction work and housing (§ 49)

For construction work the rate is set not by the annexes but by § 49 of the VAT Act as amended from 1 July 2025 (Act No. 461/2024 Coll.):

12 % — repairs, renovations and other construction work on a completed residential building (family house, apartment building, flat), regardless of size. Exception: if the work turns housing into non-residential space, for example a flat into an office, it is 21 %.
12 % — construction of a social housing building, or converting non-residential space into one. Social housing means a family house up to 350 m², a flat up to 120 m², and an apartment building where such flats make up more than half of the floor area (§ 48a).
21 % — construction of other housing (for example a family house over 350 m²) and work on non-residential buildings. Where you work on a part of a non-residential building used solely for housing, that part is at 12 %.

Between VAT payers, construction and assembly work is often subject to the reverse charge (see below). The customer then accounts for the VAT, but the rate is determined the same way.

Exemptions: with and without the right to deduct

Exempt supplies cannot be summed up in one sentence. The VAT Act distinguishes exemption without the right to deduct from exemption with the right to deduct, and the second group includes, on conditions, the supply of books and exports. Whether a supply counts towards your turnover and whether you may deduct input VAT therefore depends on which type it is.

Postal services (Česká pošta)
Financial and insurance services
Education and training (schools, universities)
Health services and supplies of medical goods
Social assistance
Letting of immovable property, with the option to tax commercial premises

So there is no general rule that an exempt supply stays out of your turnover and never carries a deduction. When you assess a registration obligation, go by the specific provision — and where the case is unclear, confirm the treatment with a tax adviser.

When you have to register for VAT

Mandatory registration

Since 2025 there are two thresholds, both tracked over the calendar year:

CZK 2,000,000 in a calendar year — you become a VAT payer from 1 January of the following year. The registration application is due within 10 working days of crossing the threshold.
CZK 2,536,500 during the calendar year — you become a VAT payer from the day after you cross it. The application is again due within 10 working days.

The CZK 2,000,000 threshold was introduced in 2023, up from CZK 1,000,000. The second threshold of CZK 2,536,500 was added in 2025, along with the switch from a rolling 12 months to the calendar year as the tracking period.

Example: in September 2026 you cross CZK 2,000,000 of turnover for the year 2026 but stay below CZK 2,536,500. You become a VAT payer on 1 January 2027, and you must file the registration application within 10 working days of crossing the first threshold.

Voluntary registration

You can register without reaching the threshold. It tends to be worth it if:

Your clients are VAT payers who deduct input VAT — your price is effectively lower for them
You buy goods or services carrying significant VAT that you would like to deduct
You trade with businesses in other EU countries, acquiring goods or supplying services

The downside is administration: VAT returns, the control statement, and the stricter rules on what a tax document must contain.

What a VAT payer has to do

VAT return

A VAT payer files a VAT return on form DPHDP3 for every tax period. The default period is the calendar month. A payer whose domestic turnover for the previous calendar year did not exceed CZK 15,000,000 (since 1 January 2025, previously CZK 10,000,000) and who is not an unreliable payer may switch to calendar quarters by notifying the tax authority by the end of January (§ 99a(1) of the VAT Act). This is not possible in the year of registration or the immediately following year; for that following year the tax office may grant an exception on request (§ 99a(3) of the VAT Act).

The return is due by the 25th day of the month following the end of the period, and the tax is payable on the same date.

Control statement

A VAT payer also files the control statement (kontrolní hlášení) on form DPHKH1 whenever the period contains supplies that have to be reported there. Legal entities file monthly; individuals file according to their own tax period, so monthly or quarterly.

The control statement lets the Financial Administration match transactions between suppliers and customers and detect carousel fraud.

Issuing tax documents

Compared with an ordinary invoice, a tax document must additionally show:

The DIČ (tax ID) of both supplier and customer
The taxable amount broken down by rate
The VAT rate
The VAT amount
The DUZP — the date of the taxable supply

Reverse charge

In some cases VAT is accounted for by the customer rather than the supplier. Domestically this applies to selected supplies, for example:

Construction and assembly work (CZ-CPA 41–43)
Supplies of gold
Supplies of immovable property, on the conditions set out in the Act
Goods listed in annex 5 to the Act (scrap, waste)

Across EU borders the reverse charge is the standard mechanism: a supply of goods to a VAT-registered business in another member state is exempt with the right to deduct, and the customer accounts for the VAT in their own country. VIES (the VAT Information Exchange System) is where you check whether a trading partner really is registered in another member state.

VAT on invoices in practice

Getting VAT right on the document itself matters. The usual mistakes:

Wrong rate — mixing up standard and reduced, especially for items that moved between the two
Arithmetic that does not add up — the taxable amount, the rate and the VAT do not reconcile, often through rounding
Missing particulars — no DIČ, no DUZP, or no breakdown by rate
A non-payer showing VAT — if you are not registered, you must not put VAT on the invoice

Invoicing software cuts down retyping and arithmetic errors, but it does not decide the correct rate and regime for you. Taxorio supports the 21 % and 12 % rates and calculates the taxable amount and VAT from the data you enter. The PRO plan produces DPHKH1 and DPHDP3 XML for supported Czech documents — check the output before you upload it to the MOJE daně portal. The VIES check is informative and never blocks you from saving a client.

VAT and the flat tax

A VAT payer cannot enter the paušální daň (flat tax) regime: on 1 January of the year of entry you must not be a VAT payer or be obliged to register (an identified person can use the flat tax). If you become a VAT payer during a year in the regime, whether by obligation or by choice, the regime lasts until 31 December of that year and you keep paying the monthly flat-tax advances until December. For the year of registration, however, you file an income tax return and the annual statements for social and health insurance, and you notify the tax office within 15 days (§ 2a(8) and § 38lg of the Income Tax Act).

Keeping an eye on the threshold

If your turnover is heading towards CZK 2,000,000, track it as you go. Since 2025 turnover is measured over the calendar year — January to December — not over a rolling 12 months, so what counts is the running total from 1 January.

A dashboard that shows income over a chosen period makes this easy. Taxorio's dashboard shows income, expenses and VAT with charts, and there is also a turnover tracker for the registration thresholds.

Summary

Since 2024 Czech VAT has run on two rates: the standard 21 % and the reduced 12 %. For a sole trader the practical task is knowing which one your goods or services fall into and stating it correctly on every tax document.

Track your turnover against the CZK 2,000,000 threshold, consider registering voluntarily if most of your clients are VAT payers, and use software that keeps the VAT paperwork in order. Where the classification of a product or service is genuinely arguable, check the specific item in the Act or apply for a binding assessment.

Official sources

Taxorio scope: Taxorio provides invoicing and income/expense records for Czech sole traders. It is not full accounting or personalised tax advice. For an unsupported or unusual case, verify the treatment with a Czech accountant or tax adviser before filing.