Module 124 min2744 wordsFree — no account
Exempt rent and waiving the exemption: who may opt for VAT and why
The module’s worked examples, then cases to attempt before revealing their solution · 2 sections · 279 words · 3 min
Worked example
What the option brings Ms Kessler
Ms Kessler opts towards the tax firm and agrees a net rent of €2,500 plus €475 VAT per month. She deducts €28,500 of input tax on the fit-out. The firm in turn deducts the monthly €475. Without the option the €28,500 would have become a cost, recoverable only through a higher rent.
Practical case
One building, three tenants, three answers
In 2026 a landlord has a new three-storey commercial building constructed. A bakery rents the ground floor, a dental practice the first floor, and a family the second floor as a flat. He also lets four underground parking spaces individually to local residents. For which spaces can he opt, which rents are taxable anyway, and which remain exempt?
Hint: For each unit, check section 4 no. 12 sentence 2 first, then the two hurdles of section 9, and ask whether section 27(2) can help with a new building.
Show the solution
The underground spaces are excluded from the exemption by section 4 no. 12 sentence 2 UStG and taxable by law, even towards private residents. For the ground floor both hurdles of section 9 are met: the bakery is a business, rents for its business and makes supplies with input tax deduction. The dental practice is a business too, but it provides exempt treatments under section 4 no. 14 letter a; section 9(2) bars the option, and since the building is constructed in 2026, section 27(2) does not help. The flat for the family already fails section 9(1). Because section 9(2) works with to the extent, the landlord can opt for the ground floor alone.
Answer: Option only for the bakery; parking spaces taxable anyway; dental practice and flat exempt
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