Czech Republic rejects VAT rate changes

The Czech Ministry of Finance has confirmed that it will hold its VAT rate at 21%, and will not proceed with a single VAT rate of 17.5%, as planned.

During the height of the financial and Euro crises, the Czech Republic raised VAT twice, initially in January 2010, and eventually reaching 21% in January 2013. At the time, the government had promised that this higher, standard VAT rate would eventually be incorporated into the reduced, 15% VAT rate at a combined 17.5%.

The proposed creation of a second reduced 10% Czech VAT rate for books, medicines and other essentials is still under consideration.

Most other Central and Eastern European countries increased their VAT rates during the same period, including Hungary hitting 27% VAT rate.