Changes 2025

Value Added Tax Act – Key Changes from 2025

Lucie Javorova
13/01/2025
Changes 2025
The beginning of 2025 brought the expected extensive amendment to the Value Added Tax Act, which came into force on 1 January 2025. There are a lot of changes and we briefly list some of them below.

A really significant change is the different construction of the period when the tax can be claimed. Newly, it is not possible to claim a deduction after the end of the second calendar year immediately following the calendar year in which the right to tax deduction arose.

On the other hand, the deadline for correcting the tax base is significantly increased from three to seven years, with the new deadline beginning on the last day of the calendar year in which the obligation to declare tax arose. However, the time limit for correction is left at the level of three years for the received payment.

An equally significant change is the area of tax refunds for so-called bad debts and the obligation to refund tax on outstanding liabilities. The taxpayer is given the possibility (but not the obligation) to correct the tax base and claim back the tax paid on receivables that meet the following conditions:

  • The claim is for a maximum of CZK 10,000 including tax and is at least 6 months overdue.
  • The sum total of claims against this creditor for which this mechanism is used is a maximum of CZK 20,000 including tax.
  • The creditor reminded the debtor at least twice to fulfil his debt.

Conversely, the duty of the taxpayer is to return the value added tax that has been claimed, if the claim has not been paid by the last day of the sixth month immediately following the month in which it became due.

Other changes include:

  • conceptual change in the registration obligations, i.e. tracking turnover for a given calendar year and the introduction of two turnover thresholds for becoming a taxpayer (CZK 2,000,000 and CZK 2,536,500);
  • the place of supply for educational actions on a virtual platform (in a B2C transaction) is the place of establishment of the recipient of the service;
  • accessories for specific medical devices, pulse oximeters and blood pressure monitors are subject to a reduced tax rate.

Not to make the VAT changes too few, we already know that there will be further big changes to real estate from 1 July 2025 and to financial services from 1 January 2026. We'll keep you posted on these topics next time.

 

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