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Belgium Introduces Optional VAT On Property Leases

Monday, January 21, 2019

On January 10, 2018, the Belgian Ministry of Finance reminded taxpayers letting and leasing certain real estate that they can opt in to the value-added tax regime.

Under the measure, taxpayers letting new or substantially renovated buildings and accompanying land used for business purposes will have the option of applying VAT to the lease, provided that the tenant is a taxable person.

The option to apply VAT will last for the duration of the lease, and the new rules will provide for an extension of the VAT adjustment period to 25 years, up from the 15 years previously.

The changes are intended to allow property owners to recover VAT from construction and renovation costs, with the leasing of immovable property in Belgium generally exempt from VAT under prior rules.

Taxpayers providing a property for not more than six months must charge VAT.

The new rules are effective from January, 1, 2019.