- The recent judgment of the Supreme Administrative Court has reopened the debate on whether the sale of commercial real estate is subject to VAT or PCC tax.
- The court ruled that the sale of a shopping center should be treated as a sale of a continuing business, which is subject to PCC tax and not entitled to deduct VAT.
- This decision contradicts current market practice and the Tax Explanations of December 11, 2018, which provided criteria for treating such transactions as subject to VAT.
- The court’s decision may affect future tax practice in transactions involving commercial real estate. However, the legal protection provided by the Tax Explanations may be limited due to the complexity of such transactions.
Source MDDP
