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Are transfers of real estate subject to VAT? How much? Who is liable? Are there any exemptions?

Transfers of real estate are subject to VAT if the seller is a VAT-payer.

VAT is charged at the rate of 20% on the transfer value.

VAT is collected from the buyer and is payable to the state budget by the seller.

Sale/transfer of land plots and land shares (except for land plots located under VAT-able real estate and included into the sale value of such real estate) are exempted from VAT.

In real life, not all sellers are VAT-payers, which also makes transactions VAT-exempted. For instance, the following categories of persons may not be or may not necessarily opt to be VAT-payers:

  • individuals – never;
  • users of a simplified tax system (private entrepreneurs or resident legal entities) if they opt so;
  • users of the general tax system (private entrepreneurs or legal entities) – until threshold for mandatory VAT registration is met.

23.10.2019

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