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A property owner inquired whether leasing accommodation for holiday stays including a buffet breakfast service is subject to VAT and how it is taxed for Income Tax purposes. The Directorate-General for Taxes (DGT) ruled that the provision of catering services makes the operation subject to VAT and that the income is classified as income from economic activities.
Property owners offering additional services such as breakfast or catering in holiday rentals must account for VAT and report income as business activity earnings rather than passive capital income.
The tax team reviews your specific situation.
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