New CJEU Ruling: Land Sales and VAT – Key Changes and Practical Questions
The Court of Justice of the European Union (CJEU) recently issued an important judgment in a Polish case concerning VAT taxation on real estate sales by individuals. The ruling may significantly impact future tax practices – and potentially have retroactive effects.
Key findings of the judgment:
🔹 An individual who sells land with the assistance of a professional representative acting on their behalf may, in fact, be considered a VAT taxpayer. As a result, such sales would not be classified as mere management of private property and would be subject to VAT.
🔹 In cases where spouses jointly sell property, the CJEU held that if the spouses acted together, they should be treated as a single VAT taxpayer. For third parties, they should not be regarded as separate entities for VAT purposes.
What does this mean in practice?
The ruling raises several practical questions and uncertainties, including:
• Will the decision apply only to future transactions, or also retroactively?
• Will Polish tax authorities and courts revise their current approach?
• Should married couples register as a single VAT taxpayer and obtain a joint VAT number?
• Will tax authorities allow the registration of a married couple as one VAT taxpayer at all?
• Could the tax office demand corrections of past transactions – including retroactive registration and submission of overdue VAT returns?
• What are the implications for property purchasers – especially in terms of their right to deduct VAT?
This judgement may have serious consequences for individuals selling land – particularly those acting jointly with a spouse.
If you have questions or concerns, feel free to contact us. Our team closely monitors the positions of tax authorities and courts and advises on how to best protect taxpayers’ interests in light of new rulings and interpretations.