VAT Tax – Changes in 2024

The Czech Republic

Until the end of 2023, the Czech Republic had a total of 4 VAT rates – a standard rate of 21%, two reduced rates of 15% and 10%, and a zero rate. From January 1, 2024, the two reduced VAT rates were consolidated into a single rate of 12%.

However, it must be emphasized that not all goods and services previously subject to the reduced VAT rates are now assigned to the 12% rate. In this aspect, there have been more changes, and the details related to the VAT rates and the products and services they apply to are presented below:

• From 10% to 0%

Books, previously subject to a 10% VAT rate in the Czech Republic, are now covered by a zero rate.

• From 21% to 12%

A lower VAT rate also applies to irregular bus and tourist transport. It is now subject to a 12% VAT rate, not the standard rate as before.

• From 15% to 12%

The consolidated rate also covers goods and services that were previously subject to a 15% VAT rate in the Czech Republic, including: child car seats, construction work, food products (excluding beverages), medical devices, pharmaceutical products, and funeral services.

• From 10% to 12%

Due to consolidation, there was also an increase in VAT taxation. Goods and services that were previously subject to a 10% VAT rate and are now covered by the consolidated rate include: accommodation services, catering services, water and sewage services, heating services, regular passenger transport, gluten-free products, magazines and newspapers, medicine, and tickets for cultural events.

• From 15% to 21%

There was also an increase in VAT for beverages, firewood, flowers, and construction and waste management services. These are now subject to the standard VAT rate. Previously, they were subject to a 15% rate.

• From 10% to 21%

The increase from a 10% rate to the standard rate also affected bicycle repairs, cleaning services, draft beer, barber and hairdressing services, rental activities, shoemaking services, and sauna operations.

Luxembourg

In Luxembourg, a temporary reduction in VAT rates, which reduced the standard and two reduced VAT rates by one percentage point, was in effect until December 31, 2023. From January 1, they returned to their original levels of 17%, 14%, and 8%.

Additionally, Luxembourg also applies a super-reduced VAT rate of 3%, as well as a zero rate.

Germany

In Germany, in response to the COVID pandemic, VAT rates on selected services and goods were temporarily reduced. Among these were restaurant and catering services, which were temporarily subject to a 7% VAT rate. From January 1, 2024, they are again subject to the standard rate of 19%.

However, it should be noted that the 7% rate will have a temporary application on New Year’s Eve. It will not apply to beverages, though.

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Ireland

Irish authorities decided to change the VAT taxation for e-books and audiobooks. From January 1, 2024, it is 0%. Previously, it was subject to the second reduced VAT rate, which is 9% in this country.

Estonia

Estonia is the only member country whose authorities changed the standard VAT rate from January 1, 2024. Until December 31, 2023, it was 20% and has been increased to 22%.

Romania

VAT rates in Romania also changed from January 1, 2024.

• From 9% to 19%

The increase to a 19% VAT rate occurred for non-alcoholic beer and products with a sugar content greater than 10g per 100g of product, except for cookies and biscuits.

• From 5% to 19%

A 19% VAT rate in Romania now covers passenger transport for tourism purposes, as well as tickets to sports facilities.

• From 5% to 9%

Meanwhile, the increase from a 5% VAT rate to a 9% rate included: social buildings, supply and installation of photovoltaic panels, solar panels, thermal systems, heat pumps, and other heating systems along with installation kits (meeting specific requirements), and necessary components purchased separately for residential buildings or public administration.

Additionally, from January 1, high-quality food (e.g., mountain or organic products), livestock, seeds, plants, and food ingredients (unless the product is an exception); access to shopping centers, amusement parks and recreational parks, whose activities fall under CAEN codes 9321 and 9329, fairs, exhibitions, cinemas, and cultural events, other than those exempt from tax, are also subject to a 9% VAT rate.

Malta

The Czech Republic consolidated two VAT rates into one, and the authorities of Malta introduced a new rate, which is exactly 12%. It covers: recreational boat rentals, certain healthcare services, security paper storage services, and certain credit management and guarantee services.

Intrastat

It is also worth mentioning that at the beginning of 2024, Intrastat thresholds changed in selected member countries, after which the obligation for statistical reporting of goods movement within the EU arises.

• In Bulgaria, these thresholds increased from 1,000,000 BGN to 1,900,000 BGN (exports) and from 700,000 BGN to 1,900,000 BGN (imports).
• In Cyprus, the import threshold was raised from 270,000 EUR to 320,000 EUR.
• In the Czech Republic, both thresholds were increased from 12,000,000 CZK to 15,000,000 CZK.
• In Estonia, the export threshold is now 350,000 EUR (previously 270,000 EUR), and the import threshold is 700,000 EUR (previously 400,000 EUR).
• In Lithuania, the export threshold increased from 300,000 EUR to 400,000 EUR, and the import threshold from 500,000 EUR to 550,000 EUR.
• In Latvia, the import threshold was increased from 300,000 EUR to 330,000 EUR.
• Intrastat thresholds were also increased in Poland. For imports, they are now 6,200,000 PLN (basic threshold, previously 5,000,000 PLN) and 103,000,000 PLN (detailed threshold, previously 80,000,000 PLN). For exports, their value is 2,800,000 PLN (basic threshold, previously 2,700,000 PLN) and 150,000,000 PLN (detailed threshold, previously 128,000,000 PLN).

Intrastat thresholds applicable in 2024 can be checked in our post – Intrastat Thresholds 2024.

VAT Tax Changes 2024 - Summary

VAT tax is an integral part of e-commerce, especially in the international dimension. Therefore, it is worth keeping your knowledge up to date on this topic, as not knowing the current regulations does not exempt from complying with them. Moreover, non-compliance can result in penalties or sanctions.

In this regard, if you are unsure about something, it is worth seeking advice from a specialist. If you need support with VAT or VAT OSS – registrations, settlements, or filing declarations – schedule a consultation, and our VAT Compliance specialists will gladly take care of your case. Contact us also if you need help with accounting in e-commerce, we can help with that too!