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A query was raised regarding whether works carried out by a tenant that benefit the landlord upon contract termination are subject to VAT. The DGT indicates that if the works constitute capital goods, their free transfer to the landlord constitutes the self-consumption of goods subject to VAT.
Landlords and tenants must consider the VAT implications of property improvements that remain in the property at the end of a lease, as these may be treated as a taxable supply of goods for self-consumption purposes.
The tax team reviews your specific situation.
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