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Post by deborah on Apr 28, 2011 11:28:11 GMT 1
Can anyone shed any light please.
7 years ago l set up a company and purchased a new build appartment in Istria.
Developer applied for usage permit and categorization for business use.
Usage permit came through and it we found out developer had applied for residential use categorization instead of business use.
He tried to change but could not.
NOW....... i have been told by the government that l have to close my company (as l do not have the right permits) and sell the appartment back to me as an individual. I then have to repay the VAT that l claimed back on a new build PLUS INTEREST backdated 7 years at 17.5%..... the tax office have already emptied my croatian business account without notification, as payment towards this amount, and l am pulling my hair out.
My accountant says this is correct as developer messed this up at the beginning. He says this is happening to may others.
Has anyone any experience of this please.
Thanks in advance
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Post by crojoe on Apr 28, 2011 12:09:54 GMT 1
Can anyone shed any light please. 7 years ago l set up a company and purchased a new build appartment in Istria. Developer applied for usage permit and categorization for business use. Usage permit came through and it we found out developer had applied for residential use categorization instead of business use. He tried to change but could not. NOW....... i have been told by the government that l have to close my company (as l do not have the right permits) and sell the appartment back to me as an individual. I then have to repay the VAT that l claimed back on a new build PLUS INTEREST backdated 7 years at 17.5%..... the tax office have already emptied my croatian business account without notification, as payment towards this amount, and l am pulling my hair out. My accountant says this is correct as developer messed this up at the beginning. He says this is happening to may others. Has anyone any experience of this please. Thanks in advance While I am no expert, I think you should look into: "tax office have already emptied my Croatian business account without notification" I have never heard of them doing this to a company, unless the company is in trouble with the law. Even then they freeze the account, not empty it. I would think they need a court junction to do this. Maybe some one else emptied it for you? It's that or we still live in a dictatorship? When you owe taxes, they will give a time limit to pay them, not just reach in and take it. It all has to be legal. I also don't see how they can demand the 17.5% taxes until you actually sell the property to yourself, and then you have a certain amount of time to pay the bill. While it might cost you something, looks like it's time to get a lawyer, and take the tax office to court. Lastly, you might want to talk with your Embassy on the matter, write a letter to your ambassador and even you’re EU PM in Brussels. It’s the squeaky wheel that gets the attention. |
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Post by deborah on Apr 28, 2011 13:16:13 GMT 1
Hi - thanks for that - have been trying to get through to the embassy all morning but with no luck. Will keep trying and will keep you posted. Teh company is not in trouble with the law at all - due to the fact there are no permits the business is doing nothing at all  Apparently the gov can go into your account at any time and take money without explaining why they are doing it. they they charge you £5 to tell you why they have taken it. Just in the process of writing to the uk embassy in Zagred to see if they can clarify d |
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Post by zvekov on Apr 28, 2011 15:29:04 GMT 1
hi deborah..
think this is rather unfortunate... a shame there is no recourse on the agent or vendor for not offering you an inadequate property which didn't meet your objectives. I will like to see if there ever is one in these parts.
The tax office is right, if you reclaimed the vat on the basis it was for business use and it happens you are using it for personal purposes then you have to give that money back. I am not too sure bout the interest bit. The tax office does not need to go through the courts to set a restraint against your account. They will follow their due procedure, and it usually gives you a bit more time than in other parts but once its done they will block your account and seek all their monies. They usually communicate with you by registered post as part of this procedure and it may be you didn't receive the mail...And after 60 - 100 days of having a blocked account, they can (by law) begin process of enforcing liquidation of the companies assets to recover their monies... may mean selling your apartment...
However, you now may need to approach them and try and find a solution and play the croatian game and buy time... You can appeal... need a lawyer as tax offices don't even try to attempt to speak anything but croatian (funny how this only happens in government departments and not in tourist locations). appeal process another 6 month minimum, even i f you just wrote an empty piece of paper. Then make an offer to pay over some extended period... More time ....which by law they'll probably reject as max period is 10 months... Then you may find that a year later you are somewhere still in discussion and then find a way to pay... At some point, there will have to be some law which allows a uk owner the same rights as a croatian owner to let to tourists on a short term basis. that way as an individual, you may be able to rent to tourists...
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Post by crojoe on Apr 28, 2011 17:42:03 GMT 1
Guess this must be why so many Croatians firms go belly up, as they have no money in their account due to this possibility, so better to just look like your bordering bankruptcy. Guess this is also why so many rich people and politicians here put their properties in family members names or some small company, so the tax office can't knock it all off. As each month goes by I am amazed at some of the new tricks of the trade I find out about on how to claim an expense. The system is so confusing, that it takes some amazing use of law to keep you’re money.
If there was ever any way for a large group of foreigners to protest the laws up here in Zagreb on owning real state, I'd join it. Just seems those who make the laws are so stubborn, and only want it their way. Everyone knows it’s a major problem, but guess some just have their heads in the sand.
Maybe what you should have done was go protest at the meeting of American investors that took place in Dubrovnik earlier this month. Maybe see if there are any other such meetings happening soon, and then put your story in writing, then hand it out to all attending. Dress up nice, speak English, look like an attendee, and then pass out your statement to all. Do it at an event that the Croatian politicians are attending, such as took place in Dubrovnik. Heck, translate it into Croatian and give it out to all media persons concerned. The reason Croatia is investor shy is due in part to what you are facing, so I would think people would understand your plight.
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Post by crojoe on Apr 28, 2011 18:04:51 GMT 1
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Post by mambo on Apr 29, 2011 17:43:58 GMT 1
It still is a rediculous low amount of money.
All of us have a basic idea how much money was stolen with the construction of the handball arena's, but up until today nobody has been arrested, no money has been returned.
Same goes for most other real estate deals with the government or project developers. None of those have been exposed, while everybody in each town could tell you exactly who profited and how much.
It is also well known in Zagreb that nothing moves unless you pay the mayor. I have not seen him getting indicted either.
It is still window dressing, to satisfy the EU, nothing else.
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Post by Madgolfer on May 2, 2011 7:30:40 GMT 1
Do you have any recourse through your original lawyer? The contract would have stated on what basis (ie; what permit etc) you were buying the property.
Unlikely, but how about going back to the developer?
Sounds unfair that you should be burdened with all of the grief.
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Post by Madgolfer on May 2, 2011 7:37:12 GMT 1
If there was ever any way for a large group of foreigners to protest the laws up here in Zagreb on owning real state, I'd join it.
A few of us tried setting something like this up back in 2008 but at the end of the day it proved to be just too difficult.
It needs a full time dedicated person to run something like this successfully, time is one issue and funding another.
Maybe the time is right again, but is the will there.
A membership with a few hundred property owners would certainly get some doors opened and with the right media exposure could do some good.
Any takers for the job?
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Post by crojoe on May 2, 2011 7:51:12 GMT 1
If there was ever any way for a large group of foreigners to protest the laws up here in Zagreb on owning real state, I'd join it.A few of us tried setting something like this up back in 2008 but at the end of the day it proved to be just too difficult. It needs a full time dedicated person to run something like this successfully, time is one issue and funding another. Maybe the time is right again, but is the will there. A membership with a few hundred property owners would certainly get some doors opened and with the right media exposure could do some good. Any takers for the job? This is why I think a more direct approach to actual investors would do better. Lately there seem to be more promo investment gatherings setup in Croatia by someone’s or somebody’s today, so this would be a good target. Outside of package holidays, I would think real-estate is the next biggest potential business in Croatia (other then buying Ina shares or building a new shopping mall). Do investors really know what they will face, or because they invest so much money they are immune to the pit-falls of Croatia? I just read about some investors trying to setup a golf course in Dubrovnik, and even now 5 or 6 years later they are still trying to realize the project, and it's like a huge investment. Then all these wonderful stories from foreign home buyers seem to be unending. How do the superstars do it? I keep reading about so and so famous bought this or that property. Do they toss so much money at it that it all works out fine? It just amazes me though that due to so many law changes that the Croatian government complicate things even more. By changing one law they go screw up everything else. Do other "normal" countries do this (since I don't live in every country on earth)? |
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Post by Madgolfer on May 4, 2011 7:04:57 GMT 1
I honestly think that it just down to naivety and inexperience on the part of lawmakers. Just because they carry the title of "politician" people assume that they know what they are doing. There have been numerous cases over the years where the lawmakers have not thought through the implications of introducing a new law, or amending and existing one, that has lead to yet more confusion and complications. Other countries have the advantage of decades of experience and have sensible/qualified people in place that can think things through and consider the various outcomes, which does not appear to be the case in Croatia yet. And as they will not bring in expert help for advice...............  |
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Post by dolphina on May 8, 2011 22:34:12 GMT 1
Well, deborah, I do feel for you. You got some good advice from the previous posters. Speaking to your lawyer is the first thing I would do.
Re:If there was ever any way for a large group of foreigners to protest the laws up here in Zagreb on owning real state, I'd join it.
The only way to do it is by using the media. Getting television shows, newspapers, magazines, internet exposure to the plight of foreigners owning real estate in Croatia.
If I could speak Croatian I would certainly take up the task. As a Canadian, I'm so used to our legal system to purchase property which is a breeze compared to what one has to go through in Croatia.
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