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