VAT and real estate transfer tax base, opinion of the financial administration

In August, we informed you about a judgement released by the Supreme Administrative Court (SAC) which has decided that, if the tax base for the real estate transfer tax is the agreed price, it is understood that it is the agreed price exclusive of VAT (if applicable), even though the explanatory memorandum to the respective act states that the agreed price means the total price inclusive of VAT.

The financial administration published their acceptance of the SAC's decision but only for cases that are in principle similar to the case decided by the court, i.e. for transfers executed between 1 January 2014 and 31 October 2016 when the payer of the transfer tax was the seller. The concerned tax entities whose tax assessment proceedings have already been completed can submit a supplementary tax return.

The financial authority also states that the potential impact of the decision and its conclusions on transfers executed after 31 October 2016 or transfers where the payer of the transfer tax was the purchaser will be analysed later. This means that the financial authority does not automatically accept the possibility of determining the tax base in the amount of the agreed price exclusive of VAT in such cases.