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 and selected catering services |
| 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 (except tap water and milk, which stay with foodstuffs), hairdressing, repairs of footwear and leather goods, bicycle repairs, domestic cleaning services, collection and transport of municipal waste, and some cut flowers
- 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 for social housing
- 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 everything not explicitly listed in the annexes to the VAT Act as reduced-rated. That includes:
- Electronics and consumer goods
- Clothing and footwear
- Cars and spare parts
- Construction work other than social housing
- Most professional services — legal, accounting, consulting, IT
- Telecommunications
- Alcoholic and non-alcoholic drinks (except tap water and milk) and tobacco products
- 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 goods and services listed in annexes 2, 2a, 3 and 3a to the VAT Act — largely items with a social, health or cultural dimension.
Goods at the reduced rate (annexes 2 and 2a)
- Foodstuffs — including infant formula, milled products, bakery products and milk (other non-alcoholic drinks are at 21 %)
- Drinking water
- Medicinal products and medical devices
- Newspapers and magazines — where the conditions of the relevant annex are met; books have their own exemption regime with the right to deduct
- Child car seats
- Firewood and wood briquettes
- Animals raised for food
- Seeds and plants for food production
Services at the reduced rate (annexes 3 and 3a)
- Accommodation — hotels, guest houses, campsites
- Catering — restaurants and canteens, excluding the serving of alcohol and tobacco
- Public passenger transport — trains, buses, city transport, cable cars
- Cultural events — entry to museums, galleries, zoos, theatres and cinemas
- Sport — entry to sports facilities, swimming pools and saunas
- Social services and health care, where not exempt
- Funeral services
- Home care for children, the sick and the disabled
- Construction work for social housing — flats up to 120 m2 and houses up to 350 m2 of floor area
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; payers with turnover for the previous calendar year up to CZK 10,000,000 may switch to calendar quarters by notification (§ 99a 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 sole trader in the paušální daň (flat tax) regime cannot be a VAT payer. If you become one, whether by obligation or by choice, you have to leave the flat tax regime; and to enter the flat tax regime you must first deregister from VAT.
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
- General Financial Directorate — changes to VAT rates from 1 January 2024
- Financial Administration — the Czech tax system and VAT rates
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.