The VAT regime for property rentals is complex, with some rentals automatically subject to VAT, others exempt without option, and some subject to VAT on option. Business premises are often subject to VAT due to the landlord’s option, while residential premises are generally exempt. Furnished premises with services may be subject to VAT, such as certain student and senior residences. The right to deduct VAT depends on whether the property is rented with or without VAT. When the property is partially subject to VAT, the deductible VAT can be 20%, 10%, or 5.5% for mixed buildings. Simplifying the process by applying a single tax coefficient to all expenses is an option.
Source Taximmo
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