Non-contractual use of goods may be subject to VAT (judgment of the Supreme Administrative Court of 9 February 2024, I FSK 694/20)
A taxpayer rented out real estate and later charged the former tenant for non-contractual use of the property. The taxpayer sought a tax ruling on whether the funds received for non-contractual use of real estate are subject to VAT. The tax authority disagreed, stating that when someone uses property without a contract and pays for it, it constitutes the provision of services for consideration. The taxpayer appealed the ruling and filed a cassation appeal against the court’s decision.
After reviewing the case, the Supreme Administrative Court agreed in principle with the interpretative authority and the Provincial Administrative Court that remuneration for non-contractual use of goods may be subject to VAT, as it is equivalent to a performance consisting of the omission of action (aimed at enforcing the item). However, during the oral justification of the judgment, the adjudicating panel pointed out that a request to hand over the property or to set a deadline for its acquisition is already a categorical expression of the will to bring about the return of the property by its owner. Thus, from that moment onwards, and not from the time when the action was brought, there is no taxable benefit.
Source Deloitte
