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Rebilling utilities (water, electricity, gas, sewage, waste disposal) and VAT in rental agreements. How to determine VAT rate and tax liability.

  • Businesses renting out properties usually pass on the actual costs of utilities to tenants
  • There are different methods of accounting for utility costs in rental agreements
  • The method chosen can impact VAT taxation and when the tax liability arises
  • Three basic options for accounting for utility costs in rental agreements are: tenant contracts with utility providers, flat-rate charges, or passing on actual costs to tenants (refactoring)
  • The choice of accounting method is important for determining the moment of tax liability and applying the correct VAT rate
  • If tenants contract directly with utility providers, the costs are not invoiced to the landlord
  • In this case, the landlord only invoices rent and does not include utility costs in the invoices


Note that this post was (partially) written with the help of AI. It is always useful to review the original source material, and where needed to obtain (local) advice from a specialist.


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