Real estate transaction tax at a tax rate of 3% is paid on real estate sales, which is prescribed by the provisions of the Act on Real Estate Sales Tax. The above-mentioned Law entered into force and is applicable from January 1, 2019. The real estate transaction tax is paid for each transaction of real estate, that is, for each acquisition of ownership.
Except for certain transactions of real estate in which the suppliers appear as payers in the value added tax system value added tax (VAT) is paid at a tax rate of 25% through the price of the real estate that is achieved on the market. The provisions of the Act clearly stipulate that real estate sales are not subject to real estate sales tax if value added tax (hereinafter VAT) is paid on real estate sales.
Thus, in the taxation of real estate transactions, there is never double taxation, but either VAT is paid (through the market price of real estate) or real estate transaction tax. Which transactions are subject to payment of VAT prescribed are a special regulation - the Value Added Tax Act.
The subject of taxation with the real estate transaction tax is the transaction of real estate. In the sense of the Act, any acquisition of ownership of real estate is considered a transaction.
The acquisition of real estate is considered: purchase , exchange, inheritance, donation, entry and exclusion of real estate from a trading company, acquisition by inheritance, acquisition of real estate in liquidation or bankruptcy proceedings, acquisition on the basis of a decision of a court or other body, acquisition on the basis of law, and other ways of acquiring real estate from other persons.< /p>
The real estate transfer tax taxpayer is the acquirer of real estate.
Tax exemptions are listed in detail in the law, so we have general exemptions, exemptions when entering real estate into a trading company, and exemptions when inheriting, gifting and other acquisitions without compensation.
The moment of tax liability is at the moment of concluding a contract, or other legal transaction, by which real estate is acquired.
The notification of the occurrence of tax liability is prescribed by the Law, and it is prescribed that the transfer of real estate will be considered as reported by the delivery of documents from notaries public, courts and other bodies that make decisions on disposal real estate, and who are obliged to submit these documents to the Tax Administration.
The deadline for payment of the determined amount of real estate tax is 15 days from the date of delivery of the decision on determining the real estate tax.
Taxation of the supply of real estate with VAT is prescribed by the provisions of the Law on VAT, which is applied as such from January 1, 2015. According to the aforementioned provisions, mandatory VAT taxation of supplies carried out by entrepreneurs in the VAT system is prescribed if they supply (certain buildings): a building or parts of buildings, including the land on which they are located before the first settlement, i.e. if no more than two years have passed since their use and if building land is delivered.
Applying the provisions of the VAT Act and the Real Estate Sales Tax Act, it follows that real estate sales tax is payable if the delivery of real estate is not subject to the obligation to pay VAT. Real estate is taxed as a single entity or with VAT through the price of real estate or real estate sales tax according to the decision made by the Tax Administration.
If real estate is supplied by a person who is not registered in the register of VAT payers, real estate sales tax is paid regardless of the status of the acquirer of that real estate.
In order for real estate to be subject to the mandatory payment of VAT, two conditions must be met cumulatively:
1. the real estate supplier is an entrepreneur in the VAT system
2. it is about the delivery of real estate: a building or part of a building (including the land on which they are located) before the first occupancy, i.e. if no more than two years have passed since its use or if it is delivery of construction land.
Every other delivery of real estate carried out by an entrepreneur in the VAT system is, as a rule, taxed with real estate sales tax, with possible exceptions prescribed by the VAT Act. A possible exception is the right to choose (opt) between payments real estate sales tax and VAT.
The possibility of opting for VAT calculation is possible only in the case when the real estate supplier is a taxpayer in the VAT system, it is not a real estate for which there is an obligation to calculate VAT , but about any other property, and the acquirer is again a person in the VAT system.
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