Businesses that acquired property in 2022 with an option for a VAT-taxable supply must notify the supplier by 28 January 2024 at the latest as to whether they have met the 90% criterion.
Option
The general rule regarding the supply of property that is more than two years old is that it is exempt from VAT. However, the buyer and seller may jointly opt for a supply subject to VAT. The condition for this is that the buyer must use the property acquired for 90% or more for transactions in respect of which the buyer is entitled to deduct VAT.
Opting for a supply subject to VAT may be particularly advantageous if the property is less than 10 years old and still falls within the review scheme. Whether a VAT-charged transfer has been opted for is usually evident from the notarial deed of transfer and from the VAT invoice issued by the seller in this regard. The VAT liability is shifted to the buyer.
Report
To verify compliance with the 90% requirement, the purchaser must notify the vendor within four weeks of the end of the financial year following the financial year in which the property was transferred, as to whether this is the case. A copy of the notification must be sent to the tax authorities.
This notification must therefore be submitted by 28 January 2024 at the latest for property supplied in 2022 with an option for a supply subject to VAT. Where the 90% criterion is met, the notification naturally has no consequences. However, where the use eligible for deduction amounted to less than 90%, the supply should not have been made subject to VAT.