The situation
A planned sale of a recently completed building
A developer has finished an office building in Brno and an apartment block in Wrocław. The Brno building received its occupancy approval three years ago. The Wrocław block was first occupied eighteen months ago. Buyers are lined up for both, and finance has to say whether the prices include VAT before the contracts are drafted.
The VAT Directive leaves the definition of a new building to each country. That is where the hours go: finding the national rule, the date the clock starts, whether later works restarted it and whether the parties can opt. One mistake moves the VAT on the whole price.
What the research has to settle
The rules behind the answer
- New buildings are taxed, older ones exempt
- The VAT Directive exempts the supply of buildings, except a supply before first occupation, which is taxable. Member states set the criteria for what counts as new, so the answer depends on national law.
- Czech Republic: a five-year window
- Czech law treats the supply of a building as taxable within five years of its first occupancy approval or first use. After that, the supply is generally exempt, with an option to tax where the buyer is a VAT payer.
- Poland: first occupation plus two years
- Polish law exempts the supply of a building except where it takes place as part of first occupation or within two years of it. After that, the parties can opt to tax if both are registered VAT payers and file a joint statement before the sale.
- Major works can restart the clock
- Both countries treat improvements above a set share of the building’s value as relevant to the new-building test. Records of the works and their cost are part of the evidence.
How it runs in azta
From the question to the document
The question, as you would type it
Developer selling an office building in Brno (occupancy approval three years ago) and an apartment block in Wrocław (first occupied 18 months ago) to VAT-registered buyers. Is each sale taxable or exempt, can we opt to tax, and what must the contracts say?
You start with
A planned sale of a recently completed building
- 01
Describe each building and its history
Give the completion and approval dates, the first use and any later works. azta searches the VAT Directive, the Czech and Polish VAT acts and the Court of Justice decisions on first occupation.
Cited research· Free - 02
Read the definitions in the original
Open the cited definitions of first occupation and the exemption in the reader, in Czech or Polish, with their in-force status.
Atlas statute reader - 03
Write the sales note
Ask for a note per building with the treatment, the dates it depends on and what changes if the sale slips. Edit it in Canvas.
Canvas · Ask azta· Pro - 04
Export for the transaction team
Export the note to Word for the lawyers drafting the sale contracts.
Word export· Pro You send
A note on whether the sale carries VAT or is exempt, and what the parties must do
What you get
A note on whether the sale carries VAT or is exempt, and what the parties must do
Sales note · draft
VAT on the Brno and Wrocław sales
Brno office building. The building received its first occupancy approval less than five years before the planned sale. The sale is therefore a taxable supply, and the price should be agreed plus Czech VAT. We are confirming the treatment of the land sold with the building.
Wrocław apartment block. The building was first occupied eighteen months ago, so the sale takes place within two years of first occupation and is taxable. The rate for each unit is set out in the annex.
If the Wrocław sale slips. A sale more than two years after first occupation would be exempt unless both parties opt to tax in a joint statement before the sale. We will update this note if the completion date moves.
Outcomes on your numbers
What azta is worth on this task
Pro pays for itself after
18 minutes a month
At €90 an hour, that is all the time Pro (€27 a month) has to take off your desk to cover its price.
Example figures. Replace them with your own.
- Hours back a year
- 32
- Capacity at your rate
- €2,916
- More building-sale VAT notes a quarter
- 1.5
- Return on Pro
- 9×
- Research
- Drafting
- Your review
A scenario you set, not a promise. The hours that come back go to another client, or deeper into this one.
Want these numbers on your team’s real workload?
Book a demoWhat stays with you
- Confirming the occupancy dates and any later works from the building records.
- Agreeing the VAT clause and the price with the buyer.
- Approving the treatment before the invoices are issued.
Frequently asked questions
- Does the land get the same treatment as the building?
- Often the land follows the building on it, but the rule is national. Ask about the plot specifically and azta cites the provision.
- Can I check the rule as it stood when the building was finished?
- Yes. Give the date and azta focuses on the law in force then, which matters if the rules changed between completion and sale.
- Does azta work out the VAT amount?
- No. It researches the treatment and drafts the note. The calculation stays in your accounting system.
