First administrative comments on VAT on rent published!

Lionel Wielemans 22 March 2019


The VAT administration published today the first commentary (Frequently Asked Questions) on the letting with VAT that came into force on 1 January 2019.

For buildings that are under construction, already marketed and eligible for the optional VAT regime, it is essential to monitor the practical issues.

The key points addressed in the FAQ’s are a.o.:

Optional VAT regime

  • Notion of (the part of a) building of accompanying land that can be rented with VAT;
  • Type of services and works allowed before 1 October 2018;
  • Costs on which VAT can be recovered as from January 2019;
  • Confirmation that a pro-fisco declaration in the contract is sufficient to opt;
  • Clarifications regarding the VAT deduction in case of vacancy.

Warehouse

  • Scope/definition;
  • Combination of short term rent and warehouse rules;
  • Obligation to opt when the tenant uses the building for business purposes;
  • Interaction of the new regime with existing contracts.

Short term rent (< 6 months)

  • What happens in case succeeding contracts exceed the 6 month period;
  • Distinction between the rent of a room and the rent of a room with services;
  • Information to be requested by the owner to assess the VAT regime;
  • Short term contracts concluded before January 2019.

These first comments are evidently more than welcome for the sector. Several questions remain however open such as the practical application of the VAT revisions (x/25), asset deals and (non-) VAT revisions, etc.

PwC and PwC Legal will be hosting a webex/seminar to update you on the new developments and to share our latest insights. You will receive an invitation shortly.

If you have any questions regarding this topic, please reach out to Pascal Janssens (PwC).