Supreme Court Ruling on VAT and Registration Tax for Preliminary Contracts with Down Payments

• The Cassation Court states that if a preliminary contract includes advance payments subject to VAT, both a fixed registration tax on the contract and on the VAT-taxable advances are due.
• This decision, based on previous regulations, seems to contradict recent court statements regarding unified taxation of preliminary and final contracts.
• The issue concerns indirect taxation of preliminary contracts with VAT-taxable advances.
• Preliminary contracts generally fall outside VAT scope but advances are subject to VAT if paid before property transfer.
• Registration tax for preliminary contracts is fixed at 200 euros, with specific rules for deposits and advances.
• Previous regulations taxed deposits at 0.5% and non-VAT advances at 3%.
• New regulations tax both deposits and non-VAT advances at 0.5% or the lower applicable tax for the final contract.
• The court examined three preliminary contracts where fixed registration tax and VAT alternative tax were applied, which taxpayers contested.

Source: eutekne.info

Note that this post was (partially) written with the help of AI. It is always useful to review the original source material, and where needed to obtain (local) advice from a specialist.

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