The tax authorities have since made many substantively different statements about whether VAT is applicable in the practice of corporations. Since 2018 there seems to be a trend, as follows:
- No contribution from tenant or integrated panels (roof systems)? Then VAT does not apply.
- Contribution from the tenant, “movable panels”.
Single-family homes: deduct VAT on investment and maintenance costs, remit on income
Collective meter: not clear (consultation between a corporation and the tax authorities is ongoing, under my guidance)
Office / SDE +: depending on how much is returned.
According to this newsletter from accountant Deloitte, a ruling was published on 25 February 2019 in which the court for single-family homes follows this line. The landlord wanted to deduct VAT from the investment, the tax authorities see this differently, the landlord is right. Now how to calculate sales tax ? that is the option you can go for.
- Because corporations can deduct VAT on the investment, and would have to pay over the income, there is a risk if VAT deduction is set aside. After all, a diligent inspector can take the position in a few years’ time that VAT must be paid on the income, even if one has forgotten to deduct VAT on the income.
- According to Deloitte, reclaiming VAT on investments is still possible from 2014 (this can be done five years ago).
- Our neighboring countries are tinkering with VAT rates to mitigate the economic consequences of the corona crisis. Belgium limits the reduction of the rate to a few sectors, but in Germany there will be a general VAT reduction.
The question then naturally arises: what does the Netherlands do?
Germany is allocating no less than € 130 billion to give the economy a boost, including through lower VAT rates. Now that the German parliament has approved the aid package, the VAT reduction will take effect on 1 July. The regular rate will fall from 19% to 16% and the reduced rate will go from 7% to 5%. The reduction applies until December 31, 2020.
Temporary reduction of VAT in Germany and Belgium
The German goal is to make sure that does not keep a tight hand. Consumers must help keep the German economy running. The reduction is temporary, with the idea: if you are thinking of a car, TV or completely new interior, now is the time. It is therefore important for Dutch companies doing business in Germany to be alert.
For example: has the new rate been reflected in the VAT declaration, are business partners using the correct rate and is the invoice software set up for it?
Belgium has also turned the VAT button to give entrepreneurs a helping hand. But our southern neighbors have limited the reduction to the catering industry. Cafés and restaurants are now allowed to charge 6% VAT, while that is normally 12% or 21%. This measure applies until the end of the year. Other sectors such as construction and fashion shops have also asked for a VAT reduction, but it is not that far yet. A possible reduction in VAT is also on the agenda elsewhere in Europe, for example in Italy. The government there is brooding on a cut that should apply for 2 years from 2021.