REALWorld Law

Taxes

VAT on an acquisition

Is VAT payable on the purchase of real estate and if so, can it be recovered?

Angola

Angola

No consumption taxes apply to purchases of real estate. VAT is expected to enter in force in October 2019 or January 2020 but will not be imposed on the purchase of real estate.

Australia

Australia

The sale of real estate by businesses which are registered for Goods and Services Tax (GST) (the equivalent of VAT) is generally subject to GST at a rate of 10 percent. However, there are a number of exceptions:

  • The sale of existing (not new) residential premises is input taxed (the equivalent of being exempt from VAT in Europe), that is, the vendor does not charge GST, but is not entitled to claim GST credits on its expenses associated with the sale.
  • The sale of property can be GST-free as farm land or where it is part of the sale of the assets of an enterprise sold as a going concern.
  • The sale of new residential premises is taxable, however, there are special GST calculation rules (referred to as the margin scheme), under which the GST liability is normally calculated on the basis of the vendor’s margin (ie the vendor’s sale price less the vendor’s purchase price).

Generally, where the sale is subject to GST and the purchaser is also a registered business, the purchaser is ordinarily entitled to claim back the element of GST as a credit against its overall liability for GST in its GST return. This is normally lodged monthly or quarterly depending on turnover. No credit is available to the purchaser where GST was calculated under the margin scheme, or for residential premises which will be leased to tenants.

Belgium

Belgium

The acquisition of new buildings is subject to VAT (generally at 21 percent). A building is considered to be 'new' for VAT purposes until 31 December of the second year following the year the building was first put to use. In some cases, old buildings that have been thoroughly renovated can be regarded as 'new' buildings for VAT purposes.

The purchase of land belonging to a new building is subject to the same VAT treatment as the purchase of the 'new building', if that land and the new building are sold simultaneously by one and the same entity. No VAT is due on the part of the price attributable to the land in the event the building is not new or if these conditions are not met. Registration duties will however be payable on the part of the price attributable to the sale of the land.

The VAT regime applies to sales, the grant of rights 'in rem' (that is rights over the real estate itself rather than rights enforceable only against the owner) or financial leases of new buildings where certain conditions are met.

In such cases the seller will be entitled to recover the VAT paid on the goods and services used in carrying out these transactions, either wholly or partially (ie any VAT charged or due on the acquisition or construction of the building).

VAT will apply if the seller is a professional developer carrying out their business, or a taxpayer or private individual who has opted for VAT to apply to the sale of the building. The buyer has no choice in this respect.

The buyer is entitled to recover VAT paid if he uses the new building in the context of activities subject to VAT. If the building is put to personal use or used for VAT exempt supplies of goods or services (such as the supply of real estate not subject to VAT or VAT exempt supplies of services in connection with real estate) the VAT charged is in principle not deductible.

Bosnia-Herzegovina

Bosnia-Herzegovina

VAT is payable on the purchase of ownership rights over a newly built property but not otherwise.

The transfer of the business assets of a taxpayer by an authorised person, including a liquidator, bankruptcy administrator or custodian, is also subject to VAT.

Canada

Canada

A 5% federal goods and services tax (GST) generally applies to the purchase of Canadian real property. Certain provinces have harmonized their sales tax regimes with the federal GST. A purchase of real property in these provinces would generally be subject to additional tax at rates varying from 8–10%, depending on the province. One province, Quebec, has harmonized in a different manner, where instead of having the additional tax levied under the federal GST legislation, it levies Quebec sales tax under Quebec legislation that is substantially similar to the federal GST.

Certain sales of real estate are exempt from GST, most notably sales of used residential real estate.

Generally, the purchaser can recover GST payable at the time of purchase (if any) by claiming an equivalent input tax credit (ITC) in its GST return, provided that the purchaser is registered for GST purposes and acquires the property in the course of a commercial activity. In many cases involving commercial real property the purchaser can self-assess, where the purchaser does not pay GST to the seller on purchase but instead reports the GST and claims an ITC in the relevant GST return, with the offset of those amounts resulting in no GST paid in respect of the purchase. Otherwise, the purchaser must pay the GST at the time of purchase, and subsequently claim the offsetting ITC as a credit against its overall GST liability when filing its relevant GST return. GST returns must be filed monthly, quarterly, or annually, depending on the revenue of the purchaser’s business.

China

China

China is going through tax reform to replace Business Tax with VAT and it has applied to Real Estate industry and construction industry starting from 1 May, 2016.

After the aforementioned tax reform, sales of real estate should be subject to VAT at 11% under the general rules. Such VAT costs will be added on top of the purchase price and finally borne by the purchaser of such real estate property. The purchaser may use such input VAT (supported by valid VAT invoices) to offset its output VAT payable on its income generated from business operations.

The tax reform program also offers transitional rules, under which the seller of real estate properties may opt for a simplified tax method if the aforesaid real estate properties were acquired by the seller before 30 April 2016, ie apply a reduced VAT rate of 5% on sale of real properties without claiming input VAT credit. If the seller of the real estate properties chooses for such simplified method, the purchaserʼs VAT costs will be reduced to 5% on the purchase price, but such 5% VAT will not be deductible against the purchaserʼs output VAT on its business income.

Croatia

Croatia

VAT can be payable as an alternative to land transfer tax in the circumstances outlined in the reply to the question on taxation of acquisitions.

VAT can be recovered by the buyer if it is a VAT payer.

Czech Republic

Czech Republic

Currently, there are three rates of VAT that may apply under the Czech VAT regime: the basic rate of 21% and reduced rates of 15% and 10%.

On a transfer of real estate, the basic VAT rate of 21% applies (except social housing, where VAT rate of 15% applies).

Transfers of buildings, flats and non-residential premises are exempt from VAT after five years from the issue of the first final approval or occupancy permit. However, a taxpayer may decide to pay VAT even after this period lapses. Land other than building land is always exempt from VAT. Leases of land, buildings, flats and non-residential premises are also exempt from VAT (except for short-term leases, ie those which last up to 48 hours).

Denmark

Denmark

The sale and purchase of real estate is — as a general rule — not subject to VAT.

However, the commercial sale of new buildings (with or without land), building sites (irrespective of whether they are developed or not), and built-up sites is subject to 25% VAT.

The rules apply to individuals as well as companies carrying on a business activity.

According to these rules a building is considered new when:

  1. it is sold before first occupation; or
  2. it is sold less than five years after the date of completion, which is no later than the day of the first occupation.

An extended or reconstructed building is considered to be a new building when:

  1. The cost exclusive of VAT of the work carried out on the building exceeds 50% of the higher of:
    1. the most recent public tax assessment of the real estate inclusive of the reconstruction work exclusive of VAT and (b) the sale price; or
  2. the cost exclusive of VAT of the work carried out to the building exceeds 25% of the higher of
    1. (a) the most recent public tax assessment of the real estate inclusive of the reconstruction work exclusive of VAT and (b) The sale price, when the building is sold with the land on which the building is sited.

The buyer has the right to recover the VAT charged by the seller if the buyer is a VAT taxpayer carrying out transactions which are subject to VAT and provided the real estate forms part of the activities subject to VAT.

France

France

VAT can be recovered under certain conditions if the asset is used for a VATable activity (eg the building is rented under the VAT regime). VAT can be recovered by offset against the VAT collected on the VATable activity or by claiming a reimbursement of VAT credit to the public Treasury. Foreign investors from outside the European Union who are not registered for VAT in France must appoint a VAT representative in order to reclaim VAT.

Germany

Germany

-

Hong Kong

Hong Kong

There is no VAT in Hong Kong.

Hungary

Hungary

As a general rule, the transfer of real estate is exempt from VAT, unless the seller opts to charge VAT at the rate of 27%. The seller may choose to apply VAT to the sale of real property other than residential properties. If the transfer is subject to VAT, then the reverse charging mechanism applies and the buyer is liable for the VAT.

The transfer of new buildings and building plots is always subject to VAT, and the seller is liable for the VAT at the rate of 27% or 5% (ie no reverse charging applies). The lower rate (5%) applies to new residential buildings and apartments having a usable floor area not exceeding 300 sq m and 150 sq m, respectively. The VAT payable on the completion of a purchase of real estate may be reclaimed in accordance with the provisions of the VAT Act.

Ireland

Ireland

VAT may be payable on the direct acquisition of commercial/residential real estate. This is determined on a case‑by‑case basis as each property has its own VAT history recording previous usage and the VAT status of the seller. A buyer may be entitled to recover VAT, depending on their VAT status and the purpose for which the property is used.

No VAT should be payable on the purchase of shares in an Irish company, regardless of whether or not it holds property.

Italy

Italy

Sales of residential real estate made by VAT liable entities are normally exempt from VAT. Residential sales are only subject to VAT if the seller is a construction company that has procured or renovated the property less than five years before the sale takes place, or after five years, if the construction company opts in the deed of sale for VAT to apply. VAT is payable at the rate of 10% (22% if the real estate is registered as a luxury dwelling).

The sale of commercial real estate (including offices and industrial property and sales of retail properties and hotel buildings separately from any associated businesses) made by VAT liable entities is subject to VAT at the rate of 22% (10% in the case of renovated properties) if:

  • the seller is a construction company that procured or renovated the property less than five years before the sale, and
  • (in any event), if the seller opts in the relevant transfer deed for the VAT tax regime to apply

In the first case VAT is applied under the ordinary rules, while in case of option VAT is applied with the reverse-charge mechanism.

Save the case where ‘reverse charge’ applies, VAT is charged to the buyer and then paid to the tax authority. The buyer may be able to offset this against deductible input VAT or claim a refund.

In the case of retail property or hotels where licences or other intangible assets are included in the sale, the buyer is considered to be purchasing a going concern, since the building is part of a business and the activities on the premises are carried out by means of authorizations held by the owner. The sale of a going concern is not subject to VAT.

Purchases of residential and commercial properties by a real estate investment fund normally follow the ordinary rules. Purchases of residential properties are normally exempt from VAT, unless the seller is a construction company that procured or renovated the property less than five years before the sale, or after five years, if the construction company opts in the deed of sale for VAT to apply. The purchase of commercial buildings by a real estate investment fund is subject to VAT, unless the seller is a construction company that procured or renovated the property less than five years before the sale or the seller opts in the sale deed for VAT to apply.

Where real estate is acquired by way of shares in the corporate vehicle holding the asset, the transaction is normally VAT exempt.

Japan

Japan

Transfer (including a lease) of assets undertaken in Japan for business purposes is subject to Japanese consumption tax (JCT), which is the equivalent of VAT in other jurisdictions.  However, transfer of land which also includes the rights attached to the land is non-taxable, while a transfer of a building or corresponding TBI is subject to JCT.  Therefore, when a building and land are transferred concurrently, the purchase price must allocate the consideration for the building and the land in order to determine the JCT obligation.  The allocation is to be agreed between the parties, and typically the parties agree upon the allocation by taking into account the assessed value for purposes of the fixed assets tax (as discussed below). 

The tax rate is currently 8%, and is expected to rise to 10% in October 2019.  JCT included in the transaction price is paid by the purchaser to the seller and the seller must then pay the corresponding JCT amount to the tax authority.

The amount of any paid input JCT in taxable transactions is creditable against the amount of output JCT.  The creditable input JCT amount is generally calculated based on the aggregated input JCT actually paid with the taxable transaction, while small businesses whose taxable sales are JPY50 million or less may utilize a simple method whereby the creditable input JCT amount is calculated by taking the output JCT amount and multiplying it by a certain percentage as determined by industry (eg 40% for real estate industry).

Netherlands

Netherlands

If newly built real estate or building land is purchased, 21 percent VAT applies by law.

If the buyer intends to use 90 percent or more of the property for activities to which VAT applies, the parties are entitled to opt for a transfer which is subject to VAT.

VAT can usually be offset against VAT received or reclaimed from the Dutch tax authorities.

Nigeria

Nigeria

The Value Added Tax (Amendment) Act 2007 (‘the Act’) provides that VAT is chargeable on all goods and services with certain exceptions as listed in the First Schedule to the Act. The Act does not define land as a good and it has been debated that real property interests is not a ‘good’ susceptible to VAT. The Federal Inland Revenue Service in practice, restricts its demand for payment of VAT on outright sale of land or rentals for residential premises as its published circular specifically included rent of residential properties in the Schedule of exempted VAT items. Based on the judicial pronouncements, transfer of title in undeveloped land should not qualify as supply of goods and therefore not liable to VAT, however, the value of any improvements or building developments constructed on the land is subject to VAT. Where VAT is applicable, the rate is 5% of the property value and where the seller is registered to collect VAT, it has responsibility to charge same to the buyer, collect and remit to the Federal Inland Revenue Service.

Norway

Norway

VAT is not payable on the purchase of real estate or on the purchase of shares in a vehicle holding real estate. However, construction work is subject to VAT. Accordingly, if a new property is built in Norway or construction works are carried out in relation to an existing building, the initial sale by the construction company is subject to VAT.

If a new property is built in Norway or construction works are carried out in relation to an existing building, the VAT payable on the purchase can be recovered if the procurements is used in the investor’s VAT liable business (including rental) and the investor is VAT registered in Norway. VAT refund is not possible for input VAT on procurements related to real estate not used in VAT liable business in Norway.

The standard rate of VAT in Norway is 25 percent.

Upon transfer of property where input VAT has been deducted, the property is deemed to having passed to non-deductible use, and (part of) the input VAT deducted must be repaid. This also applies to property sold by a business using the property in VAT-liable business. This adjustment of VAT can be omitted if the party who takes over the property also takes over the adjustment obligation. The buyer must be VAT registered in Norway and must use the property in VAT liable business to be able to take over the adjustment obligation.

When buying shares in a vehicle holding real estate, the transfer of shares does not trigger an obligation to adjust deducted input VAT.

An adjustment obligation also applies if the use of the property changes from (whole or partial) use in a business which is subject to VAT to use in a business not subject to VAT. However, fire or demolition of premises do not result in adjustment.

Poland

Poland

In the case of an asset deal (ie the direct purchase of an interest in real estate by a corporate vehicle or individual), value added tax (VAT) is payable if the seller is an entity carrying on a business and sells the interest in the real estate in the course of its business activities. VAT is payable to the tax office by the seller at the rate of 23%. The sale of agricultural land is exempt from VAT. Generally, the basis for calculating VAT is the net purchase price.

Any sales of real property are exempt from VAT if two years have lapsed since that property's first occupation. However, in some circumstances the seller may opt for such a transaction to be subject to VAT. Other specific exemptions may apply.

The buyer has the right to recover the VAT charged by the seller as input tax if the buyer is a VAT taxpayer carrying out transactions which are subject to VAT. Input VAT can be deducted by the buyer against its output VAT. Any surplus input VAT can be carried forward to subsequent months or the buyer may ask for a direct refund of the input VAT from the tax office (generally, the refund is made within 60 days).

In the case of share deals (ie the purchase of shares in a corporate vehicle holding the real estate), VAT is not payable. Similarly, if an interest in a partnership is disposed of (ie the partnership holding the real estate), VAT is not payable.

Portugal

Portugal

As a rule, the transfer of property and shares in Portugal is exempt from VAT.

Nonetheless, in the case of a transfer of property, a seller may waive the exemption if certain conditions have been met and they have complied with various formalities.

If the exemption is waived, VAT can be recovered in accordance with specific dispositions set out in the Portuguese VAT Code.

Romania

Romania

VAT applies to the supply of

  1. Plots of land that can be built upon
  2. New buildings

'New buildings' include existing buildings which have been refurbished where the cost of refurbishment, exclusive of VAT, represents at least 50 percent of the market value of the building after the relevant works were completed, as established through an expert’s report, excluding the value of the site. Supplies of new buildings are taxable if the supply is made before 31 December of the year following the one in which the building was occupied or first utilized (including the first utilization or occupation after a refurbishment).

Other supplies of real estate are, in principle, VAT exempt without any right of deduction. This means that any input VAT incurred cannot be deducted.

The supplies of real estate, if subject to VAT, falls under the reverse-charge mechanism.

Supply of real estate properties (eg apartments or houses) is subject to a reduced VAT rate provided that certain conditions are met (mainly related to the value of the property and the usable space).

Russia

Russia

The sale of real estate is also subject to VAT in Russia, but there is an exemption for the sale of plots of land and residential property (the latter is optional, subject to lodging an application with the tax authorities). Generally, the seller is required to charge, collect and remit output VAT to the budget subject to input VAT recovery. If the seller is not registered with the Russian tax authorities, a Russian buyer will be obliged to act as a tax agent, withholding 18/118ths of the purchase price and remitting it to the tax authorities.

VAT does not apply where the seller is an individual who is not treated as a VAT taxpayer (ie not registered as an 'individual entrepreneur').

VAT does not apply when a real estate asset is acquired by virtue of purchasing shares or a participatory interest in the entity holding the target asset.

Generally, input VAT attached to real estate and paid by a buyer can be recovered providing that the buyer is registered with the Russian tax authorities and conducts VAT-able activities in Russia. If the asset acquired is used for VAT exempt activities, the irrecoverable input VAT may still be deductible as an expense for profits tax purposes.

Slovak Republic

Slovak Republic

A VAT rate of 20 percent applies to building land.

Structures, including building land, are exempt from VAT if the transfer of the property takes place more than five years after the issue of the first occupancy permit or after five years from the date of first usage of the property or part of it. However, the VAT payer can also opt for the transaction to be subject to VAT. Flats and non-residential premises shall be deemed for the purpose of VAT exemption as parts of the property.

Land, other than building land, is always exempt from VAT.

VAT can be recovered if the VAT payer uses the real estate for taxable business purposes (but only to the extend that the real estate has been used for taxable business purposes).

Spain

Spain

Asset deal

VAT is payable on completion of the acquisition of the real estate when the seller is a VAT taxpayer, although the purchase of rural land or land which cannot be developed, the first transfer of buildings that have been continuously used for a period of over two years (under a lease agreement), and second and subsequent transfers of buildings are all exempt from VAT.

VAT exemption may not apply if the buyer is a VAT taxpayer entitled to a full or partial deduction of input VAT incurred on the acquisition. In this case the VAT exemption may be waived and the transaction made subject to VAT

Share deal

Sociedad Limitada/Sociedad Anónima/Sociedad en Comandita/Sociedad en comandita por acciones: the transfer of shares is exempt from VAT and transfer tax (TT). Nevertheless, TT/VAT can be incurred on the transfer of shares in companies, when the transfer of the shares is made with the purpose of avoiding the payment of the tax that would have been paid in case of transfer of the real estate. The law considers there are tax avoidance reasons where 50% or more of the assets consist, directly or indirectly, of real estate located in Spain and are not used for business activities, and, as a result of the transfer, the buyer acquires control over the company (ie more than a 50% stake in its share capital) or increases its stake once it has obtained control.

Transfer Tax is payable at a rate ranging between 6% and 11% of the value of the underlying real estate assets at the time of the transfer.

Sweden

Sweden

The purchase of real estate is not subject to VAT.

Thailand

Thailand

The sale or purchase of immovable property is not subject to VAT. However, VAT may be applicable in certain circumstances where the sale or purchase of immovable property is inclusive of moveable property, eg furniture.

United Arab Emirates - Abu Dhabi

United Arab Emirates - Abu Dhabi

The United Arab Emirates introduced a VAT regime on 1 January 2018. From 1 January 2018, the sale of real estate by businesses which are registered for VAT is subject to the following VAT rates:

  • The sale of commercial property (whether new or existing): 5% (standard rated)
  • The first sale of new residential property or charitable building (within 3 years of completion): 0% (zero rated)
  • The subsequent sale of existing residential property: exempt (no VAT)
  • The sale of bare land: exempt (no VAT)
  • The sale of a property located within a Designated Zone: out of scope (no VAT)

A special payment procedure may be applicable with the sale of certain commercial real estate by any supplier other than the developer of the property. If this procedure is applicable, the buyer of the real estate must pay the VAT directly to the Federal Tax Authorities (FTA) instead of to the supplier.

Once the payment of the VAT has been made to the FTA, the buyer will receive a Payment Transaction Number. The buyer will be required to produce the Payment Transaction Number to the Land Department in order to process the ownership transfer of the commercial real estate.

In the case of investment properties, the transaction may be treated as the "transfer of a going concern" which is considered out of the scope of VAT. The conditions for obtaining this treatment are complex and should be assessed on a case-by-case basis. 

Whether VAT can be recovered by the buyer will generally depend upon the use of the property. If and to the extent the buyer is using the property to generate taxable supplies (eg charging VAT on rents) then the VAT can in principle be recovered. If the real estate is used for VAT exempt activities, the VAT may not be recoverable. Special input tax apportionment methods for determination of VAT recovery percentage may be available (eg floorspace method), subject to conditions.

The buyer should take advice as change of use of the property could give rise to adjustments. If the VAT paid (input VAT) exceeds the VAT for which the buyer has to account for (output VAT) there may be a delay before the recoverable VAT is repaid by the Federal Tax Authority.

United Arab Emirates - Dubai

United Arab Emirates - Dubai

The United Arab Emirates introduced a VAT regime on 1 January 2018. From 1 January 2018, the sale of real estate by businesses which are registered for VAT will be subject to the following VAT rates:

  • The sale of commercial property (whether new or existing) – 5% (standard rated)
  • The first sale of residential property (within 3 years of completion) – 0% (zero rated)
  • The subsequent sale of existing residential property – exempt (no VAT)
  • The sale of bare land – exempt (no VAT)

In the case of investment properties, the transaction may be treated as the ‘transfer of a going concern’ which does not attract VAT. The conditions for obtaining this treatment are complex.

Whether VAT can be recovered by the buyer will generally depend on the use of the property. If the buyer is using the property to generate taxable supplies (eg charging VAT on rents) then generally the VAT can be recovered. However, the buyer should take advice as change of use of the property could give rise to adjustments. If the VAT paid exceeds the VAT for which the bBuyer has to account for there may be a delay before it can recover the VAT.

UK - England and Wales UK - England and Wales

UK - England and Wales

VAT does not automatically apply to the purchase of land, although in a few cases (such as newly built commercial properties) the seller must charge the standard rate of VAT (which is 20 percent as from 4 January 2011). In the case of commercial property transactions, the seller will often choose to charge VAT since this may enable the seller to recover any VAT it has paid on goods or services relating to the property. For investment properties which constitute letting businesses, the transaction may be treated as the “transfer of a going concern” which does not attract VAT, although a number of conditions need to be met for this to apply.

The purchase of residential properties or certain properties for charitable use may either be exempt or subject to VAT at the zero rate.

However, where VAT is incurred, it is often possible for the person incurring the VAT charge (in this case, the purchaser) to recover that VAT cost from the UK tax authorities. Broadly, a person can recover VAT costs incurred if they have incurred the VAT in the course of a business and the business activity involves charging VAT on goods or services supplied to others.

Where property in England or Wales is purchased with the intention of letting the property, VAT costs incurred are likely to be recoverable provided that the purchaser charges VAT on all rental income that it receives. In order to ensure that VAT is chargeable on rent (and hence that VAT incurred is recoverable), the purchaser must register for VAT in the UK and choose to charge VAT by making an “option to tax” in relation to the property.

VAT can be recovered by means of a, usually quarterly, VAT return to the UK tax authorities. Recoverable VAT costs incurred can be offset against VAT that the relevant person is required to pay to the UK tax authorities. A refund can be claimed if the former exceeds the latter.

UK - Scotland

UK - Scotland

VAT does not automatically apply to the purchase of land, although in a few cases (such as newly built commercial properties) the seller must impose the standard rate of VAT (which is 20 percent as from 4 January 2011). In the case of commercial property transactions, the seller will often choose to charge VAT since this may enable the seller to recover any VAT it has paid on goods or services relating to the property. For investment properties which constitute letting businesses, the transaction may be treated as the 'transfer of a going concern' which does not attract VAT, although a number of conditions need to be met for this to apply.

The purchase of residential properties or certain properties for charitable use may either be exempt or subject to VAT at the zero rate.

However, where VAT is incurred, it is often possible for the person incurring the VAT charge (in this case, the purchaser) to recover that VAT cost from the UK tax authorities. Broadly, a person can recover VAT costs incurred if they have incurred the VAT in the course of a business and the business activity involves charging VAT on goods or services supplied to others.

Where property in Scotland is purchased with the intention of letting the property, VAT costs incurred are likely to be recoverable provided that the purchaser charges VAT on all rental income that it receives. In order to ensure that VAT is chargeable on rent (and hence that VAT incurred is recoverable), the purchaser must register for VAT in the UK and choose to charge VAT by making an “option to tax” in relation to the property.

VAT can be recovered by means of a, usually quarterly, VAT return to the UK tax authorities. Recoverable VAT costs incurred can be offset against VAT that the relevant person is required to pay to the UK tax authorities. A refund can be claimed if the former exceeds the latter.

Ukraine

Ukraine

Asset deals are normally subject to VAT. However, the sale of undeveloped plots of land and residential real estate (apart from the first sale) is exempt from VAT. The buyer can recover input VAT provided it is registered for VAT and the input VAT is attributable to its VATable supplies in the course of its VATable commercial activities. Importantly, a non-resident may not be registered for VAT in Ukraine other than through its representative office registered in the country. Therefore, where a non-resident directly in its own name acquires real estate in Ukraine, VAT charged by a resident seller would become the non-resident's cost with no possibility of recovery.

A VAT refund can be claimed if the company's VAT position for the relevant tax period has been negative. The amount of VAT which can be refunded is limited to input VAT actually paid to suppliers or to the state budget in preceding periods. It cannot exceed the registration amount which is calculated using a special formula. A refund can be applied for to be sent directly to the company's bank account and/or to settle the tax debt formed by non- VAT tax liabilities.

United States

United States

Currently, there are no value added taxes imposed under the US federal tax system or the tax systems of any of the states.

Zimbabwe

Zimbabwe

VAT is payable on the acquisition of real estate from a property developer when the developer is a VAT-registered taxpayer.

VAT is recoverable through input tax claims.