VAT on Tender Deposits: When Does the Tax Obligation Arise in Real Estate Sales?

• The tax obligation for VAT on the deposit (wadium) arises at the moment the auction is decided, not when the sales contract is signed.
• The deposit is closely linked to the delivery of the property and functions as an advance payment.
• If the auction winner backs out, the deposit is forfeited to the seller; if the contract is not signed due to the seller or for reasons not attributable to either party, the deposit is returned.
• The Supreme Administrative Court ruled against the company’s view that the VAT obligation arises only upon signing the sales contract.

Source: podatki.gazetaprawna.pl

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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