Czech Republic: Draft amendments to VAT law include narrowing of exemptions for financial activities

Draft amendment is proposed to be effective 1 January 2025

Draft amendment is proposed to be effective 1 January 2025

A draft amendment to the value added tax (VAT) law would transpose various EU directives and respond to rulings of the Court of Justice of the European Union (CJEU).

In particular, the draft amendment includes proposed changes relating to:

  • Removal of the following activities from the list of VAT-exempt financial activities (read a March 2024 report prepared by the KPMG member firm in the Czech Republic):
    • Organizing a regulated market in investment instruments
    • Managing a customer's assets based on a contract with the customer where the assets include an investment instrument, except for the administration and custody of investment instruments
    • Keeping records of investment instruments
    • Settling trades in investment instruments 
    • Procuring collections
    • Collecting radio and television license fees
    • Paying pension benefits or recovering recurrent payments from the public
  • Supplies provided to employees
  • Changes to deadlines for claiming the right to deduct VAT or correcting the VAT base
  • Unpaid liabilities and obligation to refund the VAT deduction
  • Introduction of a small business regime
  • Changes to compulsory registration
  • Repeal of internally produced asset concept
  • Changes to corrections of the tax base relating to irrecoverable receivables
  • Certain changes to the supply of immovable property

The draft amendment is proposed to be effective 1 January 2025 and is currently in the external comment procedure.

Read a March 2024 report prepared by the KPMG member firm in the Czech Republic



The KPMG name and logo are trademarks used under license by the independent member firms of the KPMG global organization. KPMG International Limited is a private English company limited by guarantee and does not provide services to clients. No member firm has any authority to obligate or bind KPMG International or any other member firm vis-à-vis third parties, nor does KPMG International have any such authority to obligate or bind any member firm. The information contained herein is of a general nature and is not intended to address the circumstances of any particular individual or entity. Although we endeavor to provide accurate and timely information, there can be no guarantee that such information is accurate as of the date it is received or that it will continue to be accurate in the future. No one should act on such information without appropriate professional advice after a thorough examination of the particular situation. For more information, contact KPMG's Federal Tax Legislative and Regulatory Services Group at: + 1 202 533 3712, 1801 K Street NW, Washington, DC 20006.