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12 February 2020 / news

Optional VAT regime for leases

On 1 January 2019, the new optional VAT regime for immovable leases entered into force. For lease agreements that came into effect before 5 December 2019, the transitional regime is coming to its end. What should you do ?

Ceiling - Loyens & Loeff Real Estate

The two most important features of this new VAT regime are:

  • The possibility to opt for the application of VAT on certain B2B leases (on buildings constructed or significantly refurbished after September 2018); and   
  • The fact that B2B leases of warehouses are also subject to the option, and are no longer automatically subject to VAT (with a new broader definition of 'warehouse space' and no specific condition regarding the construction date).

How and when should you opt for VAT

To be valid, the option must:

  • be jointly exercised by the lessor and the tenant;
  • through a declaration or addendum to the contract, meeting certain formal requirements;
  • at the latest when the lease agreement enters into effect.

29 February deadline for agreements entered into effect before 5 December

For lease agreements entered into effect before 5 December 2019, a transitional measure was adopted, since the formal requirements of the option were not yet determined before that date.

For those agreements (if the conditions are met), you are still allowed to opt for the application of VAT until 29 February 2020.

If you believe your lease agreement falls under this transitional measure, don’t hesitate to contact us.



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