ARTICLE · 15 FEBRUARY 1996
VAT - Tax Exemption on Financial Services
The Ministry of Finance confirmed in the Decree D-130 that VAT payers whose revenues from financial services exceed 10% of either total revenue or 10M Ke are considered to be financial institutions, as stipulated in section 28 of the VAT Act. Their input VAT reclaim will be reduced proportionally as a result of rendering tax exempt financial services.
Section 28 of the Czech VAT Act differentiates between financial services which are always tax exempt (e.g. financial brokerage, foreign currency exchange operations) and financial services which are tax exempt on the condition that they are provided by a financial institution (e.g. provision of credits, investment in securities as a principal, trading on own account in securities).
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