Czech Republic Increases Value Added Tax

A Lastest News about Food , Beverages and Tobacco in the Czech Republic

Posted on: 26 Dec 2011

On January 1, 2012, Czech Republic will increase the value added tax (VAT) for select products, including food and beverages, from 10 to 14 percent. Then, on January 1, 2013, this VAT will increase to

THIS REPORT CONTAINS ASSESSMENTS OF COMMODITY AND TRADE ISSUES MADE BY USDA STAFF AND NOT NECESSARILY STATEMENTS OF OFFICIAL U.S. GOVERNMENT POLICY Voluntary Public - Date: 12/6/2011 GAIN Report Number: EZ1115 Czech Republic Post: Prague Czech Republic Increases Value Added Tax Report Categories: Retail Food Sector Beverages Food Processing Ingredients Sector Approved By: Michael Henney Prepared By: Alice Cancikova Report Highlights: On January 1, 2012, Czech Republic will increase the value added tax (VAT) for select products, including food and beverages, from 10 to 14 percent. Then, on January 1, 2013, this VAT will increase to 17.5 percent. General Information: On January 1, 2012, a new law will go into effect raising the Value Added Tax (VAT) to 14 percent (currently 10 percent). This VAT will apply to all food items, medications, public transport, social and health care, accommodation, and book sales. Miroslav Kalousek, Minister of Finance, expects the VAT rate increase to generate an extra 22 billion CZK due to this change. Petr Necas, Prime Minister, stated that the higher VAT impact will not be dramatic, because the price of food items is more influenced by changes throughout the year. Bohuslav Sobotka, leader of the opposition, mentioned that if his party will be successful in the next election their focus will be to decrease the VAT on food items. Retailers are pressuring suppliers and producers of food items to reduce their prices in order to eliminate any price changes that would affect final customers. Product quality is expected to decline if this effort by retailers persists. Price for alcohol and liquor are expected to rise 3 to 8 percent due to the raise in VAT and in cost of raw materials. Per this new law, on January 1, 2013, all VATs will be unified at 17.5 percent.
Posted: 26 December 2011

See more from Food , Beverages and Tobacco in the Czech Republic

Expert Views    
Food and Agricultural Import Regulations and Standards   By Foreign Agricultural Service
Agricultural Biotechnology Annual 2012   By Foreign Agricultural Service
Food and Agricultural Import Regulations and Standards   By Foreign Agricultural Service
EU: Language Requirements for Product Labels   By U.S. Commercial Service Germany
Hot Tips    
Alcohol consum in CE Europe   By FRD Center Market Entry Services