PDV on letting property

[zappia]

I have an apartment in Porec which I am looking to rent to one tenant this year on a long term let of 6 months. I have done this for the past two years with no problems. A contract has been drawn up for the let and I have paid all the taxes required excluding any PDV which at the time was not required. I now know that the rules have changed and in order to rent out you have to register for VAT/PDV and go through getting an accountant etc. Does anyone know if this applies to long term lets, i.e. my tenant is renting our property due to working in the area for the season? They are not tourists.

It also seems so unfair that the PDV rules mean you have to register for PDV even if you are only charging 100n p.a., whereas in the UK you do not register for VAT until you reach a turnover of over £82,000 p.a.

Is there something I'm not understanding here?

[crojoe]

Jan 11, 2016 0:46:55 GMT 1 zappia said:

I have an apartment in Porec which I am looking to rent to one tenant this year on a long term let of 6 months. I have done this for the past two years with no problems. A contract has been drawn up for the let and I have paid all the taxes required excluding any PDV which at the time was not required. I now know that the rules have changed and in order to rent out you have to register for VAT/PDV and go through getting an accountant etc. Does anyone know if this applies to long term lets, i.e. my tenant is renting our property due to working in the area for the season? They are not tourists.

It also seems so unfair that the PDV rules mean you have to register for PDV even if you are only charging 100n p.a., whereas in the UK you do not register for VAT until you reach a turnover of over £82,000 p.a.

Is there something I'm not understanding here?

From our understanding you don't have to enter the PDV system till you reach something like 280,000 Kuna. You will though need an accountant. She can then inform the local tax office that you don't have enough "steady business" to enter the system. Like most things in Croatia, it's all complicated!

[zappia]

Thanks Crojoe for your response.

I failed to mention that I have not set up a Croatian company and bought my property as an individual as I was not at the time in 2004 thinking of renting my property. I may not even rent again apart from a long let and then not to tourists. I understand that Croatian companies enter the system if they reach about 280,000 kn, however the new rules say that as an individual, and if you're renting out, you have to register for PDV on day one and not wait like a company until you reach the threshold. Seems very unfair as it's not like that in the UK.

I do not have an accountant as I've not required one (yet). I wonder if someone on this forum knows the new rules and how they would apply in my case.

Thank you.

[zappia]

An accountant in Split today told me that if I am letting my property for residential use (one person for 6 months with a Contract drawn up) as opposed to letting to tourists, then I do not have to register and apply PDV/VAT. Phew! That will save a lot of hassle!