The EU Taxonomy: what about real estate activities?

ESG is no longer merely a buzz word but has become a driving force behind many developments in the market. The real estate sector will not escape that trend. To support genuinely sustainable investments, the EU has developed a classification system of multiple economic activities to enable the identification of activities that are environmentally sustainable. Currently 102 economic activities are classified under the Taxonomy Regulation including some real estate activities.

ATAD 3: what to expect for the real estate sector?

The European Commission has deposited a proposal for a Council Directive laying down rules to prevent the misuse of shell entities for tax purposes in the EU. What would be the impact of this so-called ATAD 3 on real estate structures if adopted as it is currently proposed. Moreover it must be noted that the current proposal suggest as date of entry in force, 1 January 2024. Since the proposal also suggest a reference period of 2 years which would mean that ATAD3 already entered into force on 1 January 2022.  

No VAT fixed establishment without staff (Titanium case)

In its decision of 3 June 2021, the Court of Justice of the EU concluded that a building let in a Member State, in circumstances where the owner of that building does not have his own staff to perform services relating to the letting, does not constitute a permanent establishment within the meaning of the VAT Directive. Is this good news or bad news ?

News from our home markets

  • The renovation obligations in the Flemish Region: the governmental agenda for the period 2020-2050
  • New Circular on the Luxembourg real estate levy  
  • Foreign real estate investor-specific tax developments
  • Real estate-specific tax developments
  • Regulatory restrictions for acquisition of real estate
  • Leading case on transfer pricing for real estate development projects
  • Leading case on requirements for tax neutral restructuring of real property