The supply of books, newspapers, periodicals and other publications in printed form or in the form of an audio recording of their contents on a tangible medium is considered a supply of goods for VAT purposes. However, if books, newspapers, magazines and other publications are made available to customers in electronic form, this is a supply of a service for VAT purposes. The supply of books, newspapers, magazines and other publications both in the form of goods and in the form of services shall be subject to the relevant provisions of the Czech VAT Act.
In the case of the sale of books, newspapers, periodicals and other publications in printed form or as a phonogram of their contents on a tangible medium within the country, as well as when made available in electronic form, the VAT payer is obliged to declare the tax on the date of the VAT supply/service or on the date of receipt of payment if the payment is received before the date of supply/service.
In the case of the supply of publications in the form of goods, the date of supply is generally determined in accordance with section 21(1) of the VAT Act as the date of delivery of the goods, i.e. the date of transfer of the right to dispose of the goods as owner.
In the case of the provision of books, newspapers, magazines or other publications in electronic form, i.e. in the form of a service, the date of supply is determined in accordance with section 21(3) of the VAT Act. According to this paragraph, the date of taxable supply is linked to the date of supply of the service or also to the issue of a tax document if it is issued before the date of supply of the service.
Pursuant to Section 36(1) of the Value Added Tax Act, tax is generally levied on everything the purchaser pays as consideration for the service/delivery. Thus, ancillary costs should not be calculated separately but included in the tax base of the goods delivered or services rendered. Ancillary costs are mainly the costs of packaging, transport or insurance. When sending books and magazines by post, this means that the costs of packaging and shipping must also be included in the taxable amount.
For example, if a seller who sends a book by post sells the book for CZK 399, but adds CZK 55 for postage and packaging, the taxable amount for the 10% VAT is CZK 454.
Under the legislation in force until 1 May 2020, all three tax rates were taken into account for books, newspapers, magazines and other publications, i.e. both the basic tax rate of 21% and the two reduced tax rates of 15% and 10%. The amendment to the VAT Act, which came into force on 1 May 2020, significantly simplified the rules for applying the tax rates for books, newspapers, magazines and other publications, both in the form of goods and services.
A second reduced tax rate of 10% currently applies to books, brochures, leaflets, newspaper prospectuses, magazines and other publications in printed form, or the basic tax rate of 21% for leaflets, prospectuses and other publications where advertising exceeds 50% of the content.
The second reduced rate also applies to publications supplied electronically, provided that they would be subject to the second reduced rate if they were printed publications or publications on data carriers.
For more information about the VAT rates in the Czech Republic or Slovakia please see our blog. You can find there also more information about the Czech VAT.
