• No optional VAT system for the letting of immovable property after all

No optional VAT system for the letting of immovable property after all

23 October 2017

During summer, the Belgian federal government announced the adoption of an optional VAT system for the letting of immovable property if the lessee uses the building predominantly for VAT purposes. The purpose hereof is to allow investors to recover the input VAT on their investments. The measure was meant to take effect for rental agreements concluded from 1 January 2018.

However, during the past weekend, the council of ministers decided for budgetary reasons not to adopt this measure (yet).

It is not excluded, however, that the government will put this regulation back on the agenda at a later stage.

 

Exception for warehousing

An exception is expected to be made for the letting of immovable property only used for storage of goods that also includes office space. In that case, letting with application of VAT would apparently be possible, provided that the office comprises less than 50% of the entire surface of the premises. The scope of this regulation would, therefore, be larger than the existing administrative tolerance for letting of storage space, in which case only an office may be available which is only the used by the person managing the stored goods and may not exceed 10% of the warehouse’s total surface or volume. The regulation will thus be limited to distribution and logistics purposes.

The VAT authorities intend to issue a VAT circular letter to determine the actual conditions for this regulation. To be continued.

 

Contact

Questions regarding this subject can be addressed to one of our VAT specialists, or you can send an e-mail to [email protected]: