Changes in VAT registration – transfer

Information describes the situations and ways how a VAT registration can be transferred to another business

In terms of VAT Act exists the situations in which it is possible to “transfer” a VAT registration through a specific way from one business to other business. A VAT registration is only transferred in situation when a legal entity is not dissolved by the changing of its legal form to a different form (no change of VAT identification number). In other situations of transfer a business becomes a VAT payer (with new VAT identification number).

1. Transfer of property or transformation of a legal entity

A business who decides to transfer of property to other business, or whose legal entity is transformed, ceases to be a VAT payer on the basis of transfer property or on the basis of the registration of transformation of a legal entity to a public register or an equivalent register maintained under the laws of the given state.

           a) Change of proprietor in the case of transfer of assets

A business shall be a VAT payer from the day of property acquisition if he acquire such property for the purposes of pursuing economic activities under a decision on privatization under the Act No. 92/1991 Coll., on the conditions of transferring State property to other persons.

In this case a business has to file an application for registration within 15 days from the day of property acquisition.

          b) Transformation of a legal entity

A business on which the assets of the legal entity, that was a payer, being dissolved or split up during the transformation, is a VAT payer from the day when the transformation of a legal entity  is registered into a public register or an equivalent register maintained under the laws of the give state.

In this case a business has to file an application for registration within 15 days from the day of property acquisition.

A business (a legal entity) that, when changing its legal form to a different form, is not dissolved and its assets do not pass to a legal successor, but only its internal legal relations and the legal positions of its shareholders/member are changed, shall not cease to be a payer.

        2. Continuation of economic activities from a deceased payer

Next situation in which a VAT registration is transferred from one business to other, can be in the case of the deceased payer. An heir who has acquired property from a deceased payer and who continues pursuing economic activities shall be a payer from the day of the passage of the tax liability of the deceased based on the decision of court on inheritance.

In this case an heir has to file an application for registration within 15 days from the day when he became a payer.

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