Hannes Snellman Counsel in Supreme Administrative Court Case Confirming Real Estate Investor’s Right to Deduct VAT on Transaction Expenses
Hannes Snellman’s tax team successfully represented a client in defending their right to deduct VAT on professional services acquired in connection with a sale of shares in a mutual real estate company (“MREC”). The Central Tax Board had already ruled, as a court of first instance, in favour of our client (KVL 21/2018).
The decision confirmed that the Tax Administration had drawn wrong conclusions from the earlier Supreme Administrative Court decision dating back to 2011. The Tax Administration had interpreted this earlier decision in a way that was more disadvantageous to real estate investors than what was now considered lawful by the Supreme Administrative Court in our client’s case.
This case is an example of how a wrong interpretation of tax laws may sometimes govern the tax practice for years and result in excessive tax payments, if not challenged. Taxpayers who have sold shares of an MREC now have the possibility to have their VAT returns corrected and to claim refund of unrecovered VAT on professional services.