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V0273-22 14 February 2022 · SG de Fiscalidad Internacional Criterion in force
IVA · establecimiento permanente

Lease of a property to a tourism company is subject to VAT

A Belgian resident enquires about the taxation of leasing a flat in a tourist complex to a tourism operator. The DGT determines that the transaction is subject to VAT and examines the existence of a permanent establishment.

The DGT's ruling

The leasing of real estate to a company for its exploitation is not exempt from VAT, being taxed at 21% as the lessee is not the recipient of the housing. The subsequent leasing by the company to the end customer, if it includes hotel services, is taxed at 10%. For the non-resident owner, the income constitutes returns on real estate capital subject to IRNR at a rate of 19% and allows for the deduction of expenses according to the LIRPF. Likewise, taxation must be paid on the imputation of income during periods of non-occupation.

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