The Supreme Administrative Court decided on exclusion of VAT from the basis for assessment of the Tax on Acquisition of Immovable Property.

The Financial Authority for the South Bohemian Region in Strakonice charged the plaintiff with the Tax on Acquisition of Immovable Property (TAIP). The Financial Authority found that for the purpose of assessment of the TAIP, the stipulated price (i.e. the basis of assessment) corresponds with the payment for acquisition of the real estate property including VAT. The plaintiff appealed to this decision. However, the Financial Authority rejected it. Then the plaintiff contested the decision by filing a legal action before the Regional Court. This Court also rejected the action. Against the Regional Court’s decision, the plaintiff subsequently filed a cassation appeal.

The Supreme Administrative Court accepted such appeal and satisfied it. At the same time it cancelled the decision of the Regional Court and returned it to the administrative authority. According to the Supreme Administrative Court, under Senate legal measurement no. 340/2013 Coll., on TAIP (in the wording effective until 31 October 2016), the VAT paid by the transferor being the VAT payer, was not part of the basis for assessment of the TAIP.

In this decision, the Supreme Administrative Court diverges from the explanatory report to the Senate legal measurement. Those VAT payers who included VAT into the basis for assessment of the TAIP can file an additional tax return now and thus get back a part of this tax.

(Decision of the Supreme Administrative Court from 28 June 2017, file no. 4 Afs 88/2017)