- The transition rule for VAT treatment of service charges and utilities ended on January 1, 2025.
- Public organizations that rent out real estate must apply the new rules.
- The new rules require assessment of whether additional services qualify as a separate service or are part of the rental.
- If the service is part of the rental, it is taxed as VAT-taxable rental or VAT-exempt rental.
- Nothing has changed for VAT-taxable rental.
- For VAT-exempt rental, service charges and utilities are assessed on their own merits, making them more likely to be VAT-taxable.
- For example: utilities billed based on actual usage are VAT-taxable, but service charges that tenants are required to pay, such as cleaning of common areas, lift costs, and security, are VAT-exempt.
- Organizations should identify VAT-exempt rental with service charges and/or utilities and determine if the VAT treatment is still correct.
Source: efkbelastingadviseurs.nl
Note that this post was (partially) written with the help of AI. It is always useful to review the original source material, and where needed to obtain (local) advice from a specialist.
