From 1 January 2021, property owners in the Czech Republic will be affected by a fundamental change in the application of VAT on rental of residential properties. Currently, voluntary taxation gives landlords the advantage of claiming a VAT deduction on all purchased inputs associated with rent related to residential properties. However, beginning 1 January 2021 VAT payers will not be able to tax the rental of space designed for permanent housing. The lease of this kind of real estate will be VAT exempt without the right to deduct input VAT.
Source BDO
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