From assessment year 2024 (income for 2023 or financial years ending 31.12.2023 or later), a new formality must be completed to maintain the tax-deductibility of rental charges. Rent on dwellings is no longer deductible.
The new accountability obligation relates to the costs of renting property, property lease charges and the cost of using or acquiring rights to property (such as the right of superficies or ground leases), including additional tenancy charges.
All companies and natural persons that wish to deduct rental charges as a professional expense, as well as non-profit organisations, will have to add an annex to their income tax declaration stating:
If rental charges, etc. are not completely accounted for, they are not tax-deductible.
There is no need to justify rental charges if the rent is charged in accordance with the VAT Code, as sufficient checks are already possible in this situation.
This measure is mainly intended to verify whether natural persons are including the correct property income in their personal tax declaration, as the renting of property for professional use is taxed more heavily than renting for purely private use.
Because there is a difference in some situations between the year in which a company deducts rental charges and the year in which this income becomes taxable for the natural person, future controversy cannot be ruled out.
The rental charges for a dwelling do not need to be justified if the rental agreement has been registered free of charge, as such charges are no longer tax-deductible.
An exception to this exists if the let has been entered into by a legal entity due to a legal or contractual obligation for the exclusive purpose of housing an employee or manager.