I received an e-mail from Star Capital Finance promoting the opportunity to commission Star Captial Finance and Hoskovec - the P.S. chosen lawyers to register for a business licence with the opportunity to be possibly to re-claim VAT against the purchase price of an appartment i purchased in Prague.

I have requested costing estimates and details on the process but was keen to establish whether any other PS investors have tried / investigated this service / option.

Any views?

Can't say I have seen this but I would have a few questions.

Is there a letter from the local Customs office( or equivalent) that such a scheme is allowable or is this just the opinion of the person offering the property?
If no such letter exists, then I would want a guarantee that if the VAT was not successfully reclaimed that the seller would reimburse me.

A std apt attracts 9% VAT, but you would be buying at the top of the market and it is highly probable that prices will fall by more than 9%. Especially if Orco goes under, the news today does not look promising.

What would be the business activity? I suppose it can only be renting. If you are VAT registered then wouldn't you have to charge some service fee as opposed to rent as you surely would have to demonstrate that a service is provided. If this is the case your "rent" would be 19% more expensive. As far as I am aware rent would not be classed as vatable.

Finally, what would the cost of all the quarterly VAT returns be? How will this affect the overall accountancy fee?

These points just spring to mind based upon what I know in the UK, so feel free to point out where I may be wrong!!!

I would agree in the main with Hunter's comments .

I live in Slovakia and the DPH (vat ) tax system, does tend to follow that of the Czech Republic .

I can only report that here, DPH recovery is a total nightmare, for non Slovaks . Even you may have a Slovak company, or formal business based here employing good local accountants . I would try and talk anyone out of any scheme involving large sums of DPH recovery in Slovakia . You just won't get it back ! My personal experience is that you will get just a revolving door of excuses from the tax office .

FYI . The C&E are all on targets to collect as much cash as the can ( given the government coffers are all a lot less than they projected in their budgets ) and you, as a jolly foreigner, is seen as an easy target to add to their cash pile .

Sorry, there is no fairness in it, no quick appeal system, or effective code of practice etc ...I know two English people, that are still owed and after 2 years, some 66,000 and 12,000 euro respectively of DPH . The C&E are just playing games each month, waiting for them to give up !

There must be the law you say ???

Even expensive tax lawyers cannot seem to move the tax man ....and of course employing any lawyer, that adds more to your own cost .

Will

All very good points and have lent a helpful perspective on this.

To your main points/ questions:-

- Currently it is expressed as a potential outcome, so I would say it is the opinion of the finance and legal parties
- Once I am in receipt of the responses to the questions I asked back on the one of and ongoing costs - I'll pop them up.
- helpful thought on the proof of providing service costs

Much appreciated