Vat CGS query

W

Wacker07

Registered User
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If I sell a business property (pre 2008) that VAT Credits were calimed on can a subsequent lease of a seperate property be used to mitigate any potential CGS VAT Claw-back? or are they treated as mutually exclusive VAT transactions ?

Wacker.
 
If you have an exempt supply of property then the CGS adjustment will be due on that sale ie you owe it on that VAT return.

If you lease a property and incur VAT on the lease then you can reclaim the VAT on your VAT return. If you lease the property in the same period as the CGS adjustment then the VAT on the lease will reduce the CGS adjustment but only by the VAT on the rent incurred in the same VAT period.

EG
CGS adjustment 10,000
VAT on lease (230) Rent for two months €1,000 plus 23% VAT
Net amount owed 9,770
 
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