VAT refund

TAX ADVICE / 22. 2. 2022
0

VAT refund on real estate

It’s Thursday afternoon and my phone is ringing…

“Hello Mr Jaspar, I am the owner and creator of XYZ companies, we bought a non-residential space, I have had problems in my personal life and I want to reclaim the VAT… ”

Of course I am making light of this, shortening the text for the amusement of the reader, but the result was that I did not understand anything at first and asked for detailed information sending communication with the tax office…

I then immediately understood that the client was dealing with the tax office on 2 things

  • To avoid becoming an unreliable payer
  • A refund, a refund of the VAT on the non-residential space he bought

What happened here:

  • A new company was established which wanted to do business under a Czech ID number outside the Czech Republic.
  • No economic activity
  • Inappropriate communication with the tax office

Thus, the tax office easily deduced that this was a VAT refund where no economic activity would be carried out..

And a lesson for next time before you buy a property for a business (unless you have it for rent):

  • Have a business plan in the country
  • Have some fulfillment
  • Communicate with the tax office

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