Czech Republic Tax Agency Clarifies Application of VAT on Real Estate

The Czech Financial Administration Jan. 14 clarified the application of VAT on real estate, from July 1, 2025. The clarification includes: 1) redefinition of key real estate taxation concepts and alignment of VAT rules with EU case law for land and buildings; 2) broader VAT exemptions for transferring completed immovable property, with taxation limited to first supplies made within 23 months of completion or substantial change; 3) a new definition of substantial change, requiring construction that alters use or living conditions, with costs that exceed 30 percent of the tax base; 4) new classifications for residential and social housing buildings ...