Czech Republic: The Tax Agency has issued updated guidance on the VAT treatment of free supply of goods. The guidance clarifies that VAT applies to free supplies based on original purchase price if input VAT was deducted, and sets rules for unpurchased items and unsaleable inventory.
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Isle of Man: The Treasury announced a VAT rate reduction on domestic electricity supplies for specified taxpayers, effective from 1 October 2026. The reduction drops the rate from 5% to 0% for residential care homes and small businesses with average monthly consumption below 1,000 kWh that are not VAT registered. The public utility provider will apply the new rate to eligible supplies, reflected on customer bills from 1 October 2026.
Key Takeaways
As of 22 July 2026, the Czech Tax Agency states that VAT applies to goods supplied free of charge based on the original purchase price if input VAT was deducted, for Czech VAT-registered businesses.
From 22 July 2026, the Czech Tax Agency requires that the taxable base for unpurchased items be the market price of comparable items, or production and improvement costs where no market exists, for Czech VAT-registered businesses.
From 22 July 2026, the Czech Tax Agency allows reduced or near-zero tax bases for unsaleable inventory such as food, damaged packaging or seasonal textiles, subject to documentation requirements, for Czech VAT-registered businesses.
Primary source
Read the full article at Bloomberg TaxThis summary was published on VATfaqs.com on 25 July 2026. It relates to VAT developments in Czech Republic. The original source is Bloomberg Tax.
