Shrnutí: When you pick up a bottle of liquor, a case of beer, or a pack of cigarettes at a store, it’s not just about the manufacturer’s price and the store’s markup. Excise tax and VAT play a key role in the pricing of alcohol and tobacco products. The final price is a legal and economic puzzle: excise tax is first added to the pre-tax price, and VAT is then calculated based on that total.
In this article, we explain how excise taxes work for alcohol, beer, wine, as well as cigarettes and other tobacco products, and how VAT is factored into the final price. We’ll include specific calculation examples and highlight the changes taking effect in 2025.
From a legal perspective, excise tax is a targeted indirect tax on so-called selected products. For alcohol and tobacco, the tax is calculated according to clearly defined rules: the tax is calculated as the product of the tax base and the tax rate set for the given product. For cigarettes, the rate is a combination of a fixed amount and a percentage of the price, with a mandatory minimum tax. The law also specifies when and by whom the tax is reported, how it is handled under the conditional exemption regime, and how inspections and labeling are conducted (tax stamps for alcohol and tobacco).
VAT, on the other hand, is a general tax. Since 2024, we have had a standard rate of 21% and a reduced rate of 12%. Alcoholic beverages fall under the standard rate of 21%, so alcohol, wine, and beer are all taxed at 21%.
In practice, this means that excise tax (based on the type of product) is first added to the pre-tax price, and only then is 21% VAT applied to this intermediate total. This is why the share of taxes in the final price tends to be very high.
Not sure how to do your taxes correctly so you don’t get it wrong? We can help you navigate the law, whether it’s dealing with a specific tax situation, preparing for an audit by the tax authority or defending yourself in court.
The tax base is the quantity of pure alcohol (ethanol) expressed in hectoliters of absolute alcohol (hl a. a.). The excise tax rate on spirits will be increased in 2025 as part of a multi-year plan and will amount to 39,100 CZK/hl a. a. (i.e., 391 CZK per liter of 100% alcohol). The Ministry of Finance has already confirmed a 5% increase for 2026.
Example – Excise Tax on Alcohol (40% Alcoholic Beverage)
Excise tax is generally declared by the manufacturer or importer upon release into free circulation. You, as consumers, then pay it as part of the total price you pay for alcohol at the store.
A special reduced excise tax rate on alcohol applies to home distillation, up to the statutory limit of 30 liters of pure ethanol per distiller per production period. As of January 1, 2026, the standard excise tax rate is 41,050 CZK per hectoliter of ethanol, and the reduced rate for home distillation is 20,550 CZK per hectoliter of ethanol. The standard tax rate applies to quantities exceeding the statutory limit.
The VAT base is determined in accordance with Section 36 of Act No. 235/2004 Coll., on Value-Added Tax. According to paragraph 1 of that section, the amount payable for excise tax is also part of the tax base. Excluding a specific amount from the VAT base as an interim item is possible only if the statutory conditions are met. The mere fact that the distillery operator remits the collected excise tax to the state is not sufficient for such an exclusion.
Grower distillation** is a service provided by a distillery operator with the appropriate license, in which fruit distillate is produced for growers from raw materials supplied by the growers themselves. These raw materials may include fruit, fruit juices, or byproducts from their processing, whether fresh or fermented. The distillate is intended for the personal use of the grower and his or her household and may not be sold. **The production period runs from July 1 of the current year to June 30 of the following year.
For beer, it is not the alcohol percentage that matters, but rather the so-called wort degree (often written as “Plato degrees”). This refers to the percentage by weight of the original wort extract—that is, how much unfermented material (primarily sugars) the wort contained before fermentation—the higher the Plato, the “richer” the beer at the start.
The basic excise tax rate in the Czech Republic is 32 CZK per degree Plato and per hectoliter (hl) of beer produced. The excise tax is paid by the producer (brewery) when the beer is released into free circulation; however, you ultimately bear the cost of this tax through the price . A 21% VAT is then applied to the sum of the pre-tax price and the excise tax .
In practice, therefore, the price of the same volume of beer can vary depending on the alcohol content and on whether it comes from a large brewery or a small independent brewery, which is subject to a reduced rate (see the next chapter).
Let’s take a “10°P” beer:
Czech law distinguishes between small independent breweries—typically microbreweries or regional breweries—which, provided they meet the legal requirements, are eligible for reduced excise tax rates. Two conditions are key:
The reduced rates are tiered according to the size of the brewery and range from 16 to 28.8 CZK per °P and hl (compared to 32 CZK for large breweries). The specific classification into a bracket depends on annual production. The 21% rate applies just as it does for large breweries.
Example – a 10 °P “ten” at a small independent brewery: If the microbrewery in question falls into a bracket with a rate of , for example, 24 CZK/°P/hl, then for 10 °P the rate comes to 240 CZK/hl, which is 1.20 CZK per half-liter. Compared to a large brewery (1.60 Kč), the excise tax is therefore 0.40 Kč per half-liter lower. As always, 21% VAT is then added to this subtotal.
What are the VAT rates in 2025, and how do you calculate VAT? The next article will tell you.
In the Czech Republic, there are several specific factors regarding wine that significantly affect the final price for consumers. The most important distinction is between still wine and sparkling wine or intermediate products. While still wine (i.e., wine without excess carbon dioxide pressure, typically table wines, both dry and semi-sweet) is subject to zero excise tax in the Czech Republic, sparkling wines and intermediate products (such as vermouth) are subject to a fixed excise tax rate of 2,340 CZK per hectoliter of product. In both cases, however, a 21% VAT is applied at the point of sale.
From a practical standpoint, this means that for sparkling wine and intermediate products, you first add the excise tax of 2,340 Kč/hl to the pre-tax price and only then calculate the 21% VAT on this total. For still wine, the procedure is the same, with the only difference being that the excise tax is zero, so the 21% VAT is calculated directly from the pre-tax price.
Today, tobacco products include not only cigarettes but also cigars, heated tobacco products, e-cigarette refills, and nicotine pouches. Each category has its own excise tax structure. Let’s take a look at the individual categories:
For cigarettes, the rate is a combination of a fixed amount (CZK/unit) and a percentage (% of the retail price), and a minimum tax (CZK/unit) also applies. For 2025, rates were increased as part of a multi-year schedule. In practice, the excise tax for 2025 breaks down as follows:
How the tax per pack is calculated in practice: For a pack of 20 with a final price (what you pay as a consumer) of 150 Kč, the excise tax is approximately 90.60 Kč (the sum of the fixed and percentage components, subject to the minimum tax). The 21% VAT is then calculated based on the price including this excise tax, which amounts to 26.03 Kč. In total, taxes account for over three-quarters of the final price.
For smoking tobacco, the tax is calculated in CZK per kilogram; for cigars and cigarillos, it is calculated in CZK per piece. The following rates apply for 2025: smoking tobacco at 3,470 CZK per kilogram, and cigars at 2.65 CZK per piece. The 21% VAT is again calculated at the end.
Starting in 2024, a faster rate of increase applies to heated tobacco: +15% annually from 2024 to 2027. For 2025, the rate is 3.97 Kč/g. E-cigarette refills are subject to a rate of 5 Kč/ml, and nicotine pouches to 0.80 Kč/g. The 21% VAT is again added after the excise tax has been applied.
Not sure how to do your taxes correctly so you don’t get it wrong? We can help you navigate the law, whether it’s dealing with a specific tax situation, preparing for an audit by the tax authority or defending yourself in court.
As of January 1, 2024, the reduced VAT rates were consolidated into a single 12% rate, while the standard rate of 21% remained in effect. Alcoholic beverages (beer, wine, and spirits) fall under the standard 21% rate, so the VAT on alcohol is 21%.
For alcohol, the government followed through on its economic recovery package and, starting in 2025, increased the excise tax by 10% to 39,100 CZK per hectoliter of absolute alcohol. A further 5% increase has been announced for 2026 .
A multi-year schedule is also in effect for tobacco starting in 2024: for cigarettes and smoking tobacco, the tax will increase by 5% annually from 2025 to 2027, while for heated tobacco products, it will increase by 15% annually from 2024 to 2027. A separate tax has also been introduced on e-cigarette refills (5 Kč/ml) and nicotine pouches (0.80 Kč/g).
For beer and wine, the tax structure remains unchanged: beer is taxed at 32 Kč per degree Plato and per hectoliter (with the option of reduced rates for small independent breweries), while still wine has an excise tax of 0 Kč/hl and sparkling wine and intermediate products are taxed at 2,340 Kč/hl.
The taxpayer is generally the manufacturer, the operator of a tax warehouse, or the importer. The tax becomes due when the product is released into free circulation (e.g., upon removal from a tax warehouse, upon importation, or upon discovery of a shortage). You, as the end consumers, then bear this cost as part of the price.
For alcohol and tobacco, check the tax stamps and required information (maximum price on cigarette packaging, batch number, and warnings). Do not accept unmarked or suspicious products. You can report any suspicions to the Customs Administration.
The operator charges VAT on the price, including excise tax. You don’t have to worry about it—it’s included in the final price of the beverage.
Non-alcoholic beer (≤0.5% by volume) is not considered beer for excise tax purposes. Therefore, excise tax does not apply. VAT is charged as usual.
This is tobacco intended to be heated—without burning—in a special device.
Yes, Czech law taxes e-cigarette liquids as such, regardless of their nicotine content.
Excise tax and VAT are not always payable on alcohol and tobacco products. The law provides for several narrowly defined exceptions that either defer taxation (conditional exemption regime) or fully exempt the transaction.
Alcohol may be exempt if it is intended, for example, for the production of food and food additives, for the manufacture and preparation of medicines, or if it is specially denatured for technical use; this also includes samples for mandatory analyses.
If you purchase or import alcohol for these purposes, you generally need a permit to receive and use selected tax-exempt products issued by the customs office.
When imported in personal luggage , alcohol and tobacco may be exempt from customs duties, VAT, and excise taxes, provided you meet the non-commercial nature of the import and the quantity limits (which differ for travel from non-EU countries versus travel within the EU for personal consumption).
Arrival from third countries (outside the EU)
For alcohol, you may import either 1 liter of spirits with an alcohol content exceeding 22% (or undenatured alcohol with an alcohol content of at least 80%), or 2 liters of alcohol with an alcohol content of up to 22%. In addition, you may bring in 4 liters of still wine and 16 liters of beer.
For tobacco products, you may import 200 cigarettes, or 100 cigarillos weighing up to 3 g each, or 50 cigars, or 250 g of smoking tobacco, duty-free. These options may be combined. For heated tobacco products, the limit is 100 g; for e-cigarette refills, 20 ml; and for nicotine pouches, 100 g. In addition to quantity limits, there are also value limits for other goods: €430 for air or sea transport, €300 for road transport, and €150 for persons under 15 years of age.
Intra-EU Movements for Personal Use
Within the EU, neither customs duties nor VAT are levied at the border; however, an assessment is made to determine whether the goods are for personal consumption and whether they were taxed in the country of purchase. The approximate thresholds used by tax authorities to assess non-commercial use are as follows: 10 liters of spirits, 20 liters of fortified wine, 90 liters of wine (of which no more than 60 liters may be sparkling), and 110 liters of beer.
For tobacco products , the limit is 800 cigarettes, 400 cigarillos weighing up to 3 g each, 200 cigars, and 1 kg of smoking tobacco. For other nicotine products, the Czech Customs Administration’s guidelines use the following approximate values: 250 g of heated tobacco products, 80 ml of e-cigarette refills, and 500 g of nicotine pouches. These levels are not strict limits, but significantly exceeding them may lead to the conclusion that the goods are not for personal consumption.
In certain situations , diplomatic missions, NATO armed forces, and similar entities may be eligible for exemptions. These are strictly defined cases subject to rigorous administrative procedures (including certified documents and approvals).
For non-commercial imports within specified quantity and value limits, alcohol and tobacco are exempt from VAT (as well as customs duties and excise taxes). Again, however, these items must be for personal consumption.
Certain entities may claim a VAT exemption (typically based on certification and special procedures). These are international exemptions that apply only after formal requirements have been met.
Excise tax constitutes a significant component of the final price of alcoholic beverages and tobacco products. When determining the VAT base, the amount paid toward excise tax is also taken into account pursuant to Section 36(1) of the VAT Act. As a rule, the standard VAT rate of 21% applies to taxable supplies of these products. In 2025, the standard excise tax rate on alcohol was 39,100 CZK per hectoliter of pure ethanol, while a reduced rate of 19,600 CZK/hl up to the statutory limit of 30 liters of pure ethanol per grower per production period. The standard excise tax rate on beer was 32 CZK per hectoliter and for each full percentage by weight of original wort extract, with reduced rates applying to small independent breweries. Still wine was subject to a zero excise tax rate, while sparkling wine and intermediate products were subject to a rate of 2,340 Kč/hl.
For tobacco products, the method of taxation varied depending on the type of product. Cigarettes were subject to a combined excise tax consisting of a fixed and a percentage component, with a minimum tax rate. The base rate for smoking tobacco was 3,470 CZK/kg, for cigars and cigarillos 2.65 CZK/piece, and for heated tobacco products 3.97 CZK/g. E-cigarette refills were taxed at a rate of 5 Kč per milliliter, and nicotine pouches at a rate of 0.80 Kč per gram. Excise tax, together with VAT, can thus account for more than half of the final consumer price, particularly for certain spirits and cigarettes. The specific proportion depends on the type of product and its retail price.
The years 2024–2026 will see gradual tax increases (spirits +10% in 2025, for tobacco, a long-term increase—cigarettes and smoking tobacco +5% annually, heated tobacco +15% annually). Starting in 2024, VAT will have two rates (12% and 21%), with alcohol and tobacco falling under the 21% rate. Exemptions exist in narrowly defined cases (personal imports or special regimes for diplomats).
No excise taxes are due, but the 21% VAT still applies.
No. Home distillation is subject to a reduced excise tax rate, which is approximately half the standard rate. However, there is a statutory limit of 30 liters of pure alcohol per grower per production period (from July 1 to June 30 of the following year). Exceeding this limit may result not only in the application of the standard excise tax rate to the excess amount but also in the imposition of a fine.
The seller must be licensed, comply with the ban on sales to minors, and sell only properly labeled products (tax stamps, required information).
First, the excise tax applicable to the product is added to the pre-tax price, and only then is the 21% VAT applied. That is why taxes account for a significant portion of the price.
Not sure how to do your taxes correctly so you don’t get it wrong? We can help you navigate the law, whether it’s dealing with a specific tax situation, preparing for an audit by the tax authority or defending yourself in court.
Ondřej is the attorney who came up with the idea of providing legal services online. He's been earning his living through legal services for more than 15 years. He especially likes to help clients who may have given up hope in solving their legal issues at work, for example with real estate transfers or copyright licenses.
Ondřej is the attorney who came up with the idea of providing legal services online. He's been earning his living through legal services for more than 15 years. He especially likes to help clients who may have given up hope in solving their legal issues at work, for example with real estate transfers or copyright licenses.
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