Practical problems are found in the tax handling of real estate that goes under the hammer. As a result, income declarations or other satisfactory data are not submitted by the property owners that would facilitate the decision for proper taxation of the dispositions resulting from the sales. Due to these problems, there is a delay in the whole process, which increases the pending cases.
In an effort to address the problems, the Tax Department issued an implementing directive. As noted, most cases of sales come from the commercial stock of persons active in the real estate sector. According to the Law on Transfer and Mortgage, the sale process is initiated by the mortgage lender, who is not obliged to submit an income declaration of the owner of the sold real estate or does not have any other elements that will assist in the correct taxation. The Tax Department, based on relevant case law, when examining the sale cases will be based on the objective examination of the marketing criteria for each case separately. Based on the new data, the officials of the Tax Department within the framework of the taxation of the properties that are sold will act as follows:
-In cases where it is easily and clearly extracted through the trading criteria that the transaction is of a marketing nature, since the sold real estate comes from a commercial stock of persons engaged in land exploitation or real estate trading, the transaction will be automatically taxed for tax purposes. income.
It is worth noting that for the issuance of the Certificate of Settlement of Tax Obligation for the purpose of transfer of the property, it is necessary to first examine whether there is a profit and income tax from the sale and if it occurs, it will be paid by filing a temporary tax. income on disposal profit.
-In case of non-submission of income statement / accounts by the owner or substantiated data on the part of the mortgage lender in relation to the calculation of profit or loss from the disposal, the officer of the Tax Department will determine the result based on his judgment and will require the mortgage lender to pay the corresponding income tax in case of a profit from the disposal.
-In cases where the sold real estate comes from persons of other categories, it will be necessary to fill in a questionnaire from the examination of which it will be decided whether the profit or loss from the income tax or the capital gains tax.
In the meantime, the claims for refund of amounts of taxes paid, will be examined after the submission and examination of the income declarations of the property owners or the submission and examination of objections. When the competent Department imposes any tax in relation to the sale, it will inform both the mortgage lender and the taxpayer in writing. Finally, in case of objection and decision for refund of tax amounts, it will be done when there is a written consent of both the mortgage lender and the owner of the real estate, with an indication of which of the two will be transferred the return. This will be done following a decree of the District Court.