When does the change of the intended use of a plot of land affect VAT on advance payments?

When does the change of the intended use of a plot of land affect VAT on advance payments? The latest interpretation of the Head of the National Fiscal Information

• Advance Invoice Correction Required: The National Tax Information Service ruled that advance invoices must be corrected to reflect the applicable VAT rate of 23% when the legal status of undeveloped plots changes to construction areas, despite initial invoices being issued at an exempt rate.
• Tax Implications: The ruling emphasizes that the tax obligation arises upon receipt of advance payments, but the VAT rate is contingent on the land’s designation at the time of the actual supply, necessitating ongoing monitoring of land status.
• Consequences for Real Estate Transactions: Sellers must be vigilant about changes in local spatial plans and promptly correct advance invoices to avoid tax liabilities related to underreported VAT, highlighting the importance of understanding VAT regulations in real estate dealings.

Source Daniel Więckowski

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