Commercial real property
Based on the new decree, service charges (including utility costs) for the VAT taxed lease of commercial real property are still subject to VAT. For VAT exempt leases, unlike now, this is no longer always be the case.
Residential real property
For leases of residential real property (other than short-stay), the existing practice is that service charges (including utility costs) are charged without VAT. According to the guidelines in the new decree, service charges and utility costs for residential real property are in some cases actually subject to VAT.
The new rules may lead to changes in the administration and VAT returns and may also need to be communicated to tenants. Do you have any questions on this development? Via the link below you will receive a news release including some Q&A’s on the practical implications of the changes.
