New reporting obligation for tenants to declare certain rent payments: risk of non-deductibility in case of non-compliance!


Who is in scope?

This new reporting obligation applies in principle to all legal entities and natural persons who are required to file an income tax return in Belgium. It does not matter whether this concerns personal income tax, corporate income tax, legal entity tax or non-resident tax.

However, the reporting obligation is only applicable to natural persons insofar they deduct the rent payments as tax-deductible expenses in their income tax return. Legal entities, on the other hand, are obliged to report regardless of whether they have treated the payments as tax-deductible expenses.

Note that not only rent but also real estate rights such as leasehold (‘erfpacht/bail emphytéotique’), building right (‘opstalrecht/droit de superficie’), usufruct (‘vruchtgebruik/ usufruit’) are envisaged by this obligation.

What needs to be reported?

The tenant or rights holder must complete a form 270 MLH with certain information and have it attached as an annex to their annual income tax return. This form must include, among other things: identification of the landlord, the address of the real estate, the rent paid/attributed during the taxable period and the amount which was deducted as tax-deductible expenses.
The Belgian tax authorities emphasize that the form 270 MLH must be submitted per property. This means that if the rental payments relate to multiple properties or rental agreements, several forms 270 MLH will have to be completed and attached as an integral part to the tax return.

Exception in case of VAT-compliant invoice

An exception exists when the rented real estate is related to the supply of goods or services carried out by a taxpayer established within the EEA and a VAT-compliant invoice or document has been issued for the rent. In this case, there is no requirement to report the expenses on the form 270 MLH.

Consequences of non-compliance

Failure to adhere to the reporting obligation will result in the non deductibility of the underlying rent expenses. Additionally, non-compliance could also lead to an incomplete filing which could potentially trigger various adverse tax consequences, such as administrative penalties, tax increases etc..

Key takeaway

We advise you to make an assessment of the impact of this new reporting requirement in order to avoid any adverse tax consequences as outlined above. As this formality applies already as from assessment year 2024, this assessment should be made in the coming months.

How can we help?

We are more than happy to assist you in navigating and complying with this new reporting obligation. Please feel free to get in touch with Tim Pieters or Karl Struyf to discuss this matter.