em
Junior Member
Posts: 13
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PDV
Dec 3, 2011 10:01:52 GMT 1
Post by em on Dec 3, 2011 10:01:52 GMT 1
Has anyone had any success in winning a pdv repayment claim against the Croatian tax authorities?
We reclaimed the pdv on our house reclamation project in 2007-8 but the tax people have subsequently said that we were not entitled to do this and have claimed it all back + a hefty interest change.
I am aware others have faced this but am not aware of anyone who has actually won their case at appeal.
Any guidance would be helpful. Thanks.
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PDV
Dec 3, 2011 11:43:12 GMT 1
Post by zvekov on Dec 3, 2011 11:43:12 GMT 1
i thought if you were going to engage in a business activity which will generate pdv for gov't then you are entitled to reclaim. If you just reclaimed pdv and used your house as a second home then i believe the gov't are right to refuse. There may have been a special dispensation for restoration projects...accountant may guide you... And if you are right defend it vociferously
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PDV
Dec 3, 2011 13:04:00 GMT 1
Post by upthevilla on Dec 3, 2011 13:04:00 GMT 1
PDV. bad news i`m afraid
If you claimed for the pdv on the renovation of your house then it was for business purposes and you must then " do business "
If you have subsequently NOT rented the house to tourists, long term rental or have NOT produced invoices and an income related to the house renovations which you claimed the pdv from then you were NOT entitled to reclaim the pdv back.
You are usually given approximately 1 - 2 years to show an income into your company. I presume that You have not shown an income and therefore You MUST pay it back with the interest and be grate full that they do not prosecute you for fraudulent pdv claims.
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em
Junior Member
Posts: 13
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PDV
Dec 3, 2011 13:50:30 GMT 1
Post by em on Dec 3, 2011 13:50:30 GMT 1
We bought it via a ltd. co. (d.o.o) It took us approx. two years to do the refurb and until end 2010 to get categorisation. In 2011 we have rented the house out as a business and paid pdv in on the rental income. In the years we were awaiting categorisation and getting the house fully furnished and equiped to rent out, we stayed in the house. We had a tax inspection mid 2010 and they spotted we had stayed there. They calculated the tax bill+interest which we paid. They then did a second inspection and changed their minds on the first ruling and said that because we had stayed at the house we had demonstrated that we never intended to use it for legitimate business purposes and therefore could not reclaim the pdv. They do not seem to be interested in the fact that we could not legitimately do business prior to getting cat. late last year. If anyone has successfully defended such a case, please get in touch... Thanks.
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em
Junior Member
Posts: 13
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PDV
Dec 5, 2011 14:24:29 GMT 1
Post by em on Dec 5, 2011 14:24:29 GMT 1
We stayed in the property for a few weeks each year that it was empty. We made the big mistake of declaring this through our accountant without payng 'rent' (most owners in the same position kept quiet). In the first tax inspection, they imposed a hefty fine for this 'crime' which we paid immediately. Fair cop. We spent the vast majority of time at the house, chasing builders to complete work (searching for reasonably priced and quality furniture (not easy inCroatia!) - not sure what the going rate is for staying in a partially completed house with no furniture! Also we were trying to find a way through the nightmare of getting categorisation so that the business we had paid to set up and been assured was the best way to buy and rent out a property, could begin to trade. We have spent large amounts on project managers, lawyers and accountants in a seemingly fruitless attempt to do so legally. At no point did we rent out the property whilst we were seeking categorisation. Ifwe had known that we could not set up the business of renting out the house, we would not have bought it but it seems that no one is sure of the'rules' in croatia and attempting to conduct business legally is penalised at every turn. Once we finally gained our blue plaque, we foolishly believed the nightmare to be over and were at last able to register some money coming in to the business (although mostly taken up with ongoing costs) and also to enjoy a holiday ourselves, rental paid. Needless to say, the tax office has accepted the PDV we have paid on the year's rental of a house owned by a business (all fees paid) and furnished and maintained as a business. However now we are being told it is a private house and we must pay back the legitimate caim for PDV plus an extortionate amount of interest. It is hardly suprising that Croatia does not attract foreign businesses (or even national) to invest. Perhaps once they have got their hands on our pension they will be happy (which is the where it will have to come from). To say we are disillusioned with a country we have loved, is an understatement. And to be told that because we didn't show any income for 3 years (we couldn't!) and ought to consider ourselves lucky not to be prosecuted for fraudelnt PDV claims ........ Unbelievable! But then again....
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PDV
Dec 5, 2011 18:21:14 GMT 1
Post by Bron on Dec 5, 2011 18:21:14 GMT 1
Unfortunately I can't offer any solutions Em but lots of sympathy....totally recognise how frustrated and disillusioned you must be. It certainly does seem that Croatia wants to penalise those who try to conduct business legally. It's just all so complicated and expensive, it wears you down. Just when you think you've overcome one obstacle, something else rears its ugly head to defeat you. We just have to hope that entry into the EU will help make things easier??? Many times we've wanted to throw in the towel and sell our house but after investing so much time, money and effort, it's hard to just walk away... plus it's not the right time to sell. Good luck in getting it sorted.
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