Disclosure requirement for tenants deducting rent as professional expenses
January 2024 - Through a bill dated 19 October 2023, the federal government announced a new measure for tenants deducting rent paid as a professional expense. This bill was passed on 28 November 2023.
Basis principles
Today, if an owner of a second home rents this property privately, it is not taxed on the real rental income, but rather on the indexed cadastral income increased by 40%.
If a tenant wants to use this property for professional purposes, there is no assessment based on the KI, but rather on the real net rent received (with the minimum being the indexed cadastral income increased by 40%).
Because of the major impact of the tenant's use (private or professional), private rental agreements usually state that a property may only be used for private purposes.
Anno 2023 tax records have insufficient data to verify whether rental fees deducted from the tenant are declared to the landlord based on net rental income.
New attachment to tax return
Therefore, a new annexure will be added to personal and corporate income tax returns from assessment year 2024. As a result, both private tenants and corporate tenants, who deduct rental fees, will have to add an attachment to the return stating:
name, address and national register number or company number of the landlord
address of the property
amount of the rental payments
the portion of the rental fees deducted as professional expenses
If this new obligation is not respected, the rental or other fees will not be deductible as professional expenses.
