Sep 25

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Real estate sellers who were payers of the real estate acquisition tax in the period 2014-2016 may request refund of a part of the tax they paid.

Upon judgment of the Supreme Administrative Court, tax administrators should now respect, as a new thing, that in determining the price agreed for the purposes of real estate acquisition tax, VAT is not a part of that price.

So far, the real estate acquisition tax was being calculated from the purchase price including VAT.

Based on the grounds of the judgment of the Supreme Administrative Court, it is not possible that a transferor pays the real estate acquisition tax also from VAT which has been paid to the state and never became a part of the transferor’s property.

You can request refund of the tax upon an additional tax return which may be lodged within three years from the date when the deadline for lodging the tax return expired.

The judgment of the Supreme Administrative Court does not apply to cases when the transferee, i.e. the buyer was the payer of the real estate acquisition tax. Therefore, buyers may not request tax refund and it still holds that if the buyer is a tax payer, VAT is a part of the purchase price. However, the Supreme Administrative Court should be soon passing a judgment concerning a similar situation where the tax was paid by the buyer. Based on that judgment, buyers should be then eligible to request refund of a part of the tax as well.