Below are the most important opinions of the Ministry of Finance in the field of value added tax, which were published in the previous period.
Impact of the supply of goods acquired after the transfer of the entire property to the tax treatment of the specific transfer
„…if, after the transfer of the entire property, the VAT payer – the transferor of the property, carries out the supply of goods received after the transfer of the entire property were made and if in the specific case such goods represent compensation for the supply VAT payer had carried out before the transfer of entire property, the fact that the VAT payer has carried out such supply has no effect on the tax treatment of the transfer of the entire property.”
(Opinion of the Ministry of Finance, No. 430-00-243/2018-04 dated 21.5.2018.)
VAT treatment of the supply of construction services carried out between several co-investors
„…in the execution of the contract based on which the construction of the facility and the distribution of economically divisible units of such facility are carried out, in case when several entities – co-investors have the property right on the land on which the facility is being built and when the construction permit is issued on the behalf of all co-investors (where one co-investor is a VAT payer, while other co-investors are not), whereby the construction of the facility is carried out by the suppliers engaged only by the investor who is the VAT payer, tax treatment is as follows:
- VAT payer – the co-investor who has built i.e. financed the construction of the facility, is obliged to calculate and pay VAT in accordance with VAT Law (at the rate of 20%) for the supply referred to in Article 4, Paragraph 3, Item 6) of the VAT Law i.e. for the delivery of parts of the facility to other co-investors proportionate to their ownership shares on the land on which the facility was build. Such co-investor has a right to deduct the input VAT based on such supply in accordance with the VAT Law;
- VAT should not be calculated and paid on the transfer of the ownership rights on the economically divisible units within the newly built facility, which is carried out by the other co-investors who are not VAT payers (the transfer made to the VAT payer who had built i.e. financed the construction of the facility as the compensation for the construction in question). The subject transfer is subject to the Transfer Tax in accordance with Property Tax Law;
- VAT should be calculated (at prescribed VAT rate) and paid on the first transfer of the disposal rights on the economically divisible units within the newly built facility from the Article 4, Paragraph 3, Item 7) of the VAT Law, made by the VAT payer who had built the facility, and which this VAT payer had originally acquired (in proportion to his ownership share on the land on which the facility in question was built). Such VAT payer has a right to deduct the input VAT based on such supply in accordance with the VAT Law;
- The Transfer Tax in accordance with the Property Tax Law or the VAT (if all prescribed conditions for VAT contracting are met) should be paid on the transfer of the ownership rights on the economically divisible units within the newly built facility, which is carried out by the VAT payer who has built i.e. financed construction of the facility, and which were acquired from other co-investors as the compensation for supply from the Article 4, Paragraph 3, Item 6) of the VAT Law.”
(Opinion of the Ministry of Finance, No. 413-00-58/2018-04 dated 15.5.2018.)