The amendment to the VAT Act introduces numerous changes and is undoubtedly the most significant update to VAT legislation since 2016. It aims—albeit with a time delay—to reflect the rulings of the Court of Justice of the European Union (CJEU) and introduces long-missing rules for virtual events.
Parts of the amendment already came into effect in 2025, while several key changes become effective on 1 January 2026.
One major change concerns VAT registration thresholds – the method for calculating turnover has been revised, an additional (second) annual turnover threshold has been introduced, and the relevant deadlines have been modified. If turnover in the January–December period exceeds:
- 2,000,000 CZK – VAT liability arises on 1 January of the following year.
- 2,536,500 CZK (100,000 EUR) – VAT liability arises immediately upon exceeding this threshold.
From January 2026, financial activities under Section 54 of the VAT Act will be exempt from VAT, while the exemption for collecting broadcasting fees will be abolished. Rules concerning the tax exemption of securities will also be adjusted.
Also effective from 1 January 2026 is legislation regulating the principle of reciprocity for VAT refunds to foreign entities from third countries. A list of cooperating countries has been prepared for this purpose. Companies engaging in international business should review in which countries VAT refunds will continue to be available.
The amendment further extends the time limit for correcting the tax base from three to seven years, significantly broadening opportunities for subsequent corrections. This new regime also applies to persons who are no longer VAT payers at the time of the correction.
Below is an overview of the main changes by section:
- Section 54 – VAT exemption for financial services
- Section 66(3–6) – Export of goods
- New rules for export in passengers’ personal luggage
- Clarification of conditions for VAT exemption
- Section 80 (10, 11, 12, 13, 17) – VAT refunds
- Updated rules for refunds to persons with disabilities
- Changes to the refund process
- Section 80a – VAT refunds
- Comprehensive revision of the refund system
- Section 83 (1, 2–6) – VAT refunds to foreign persons based on reciprocity
