In situations where both the lessee and the lessor of a property are legal entities, there is an option to apply VAT instead of Stamp Duty to Commercial leases.
Law on Commercial Leases with VAT:
1. The amendments in Article 17 update Case d) of Paragraph 2 and Paragraph 5 of Article 8, as well as Paragraph 3 of Article 33 of the VAT Code. These changes allow for the option to apply VAT to professional real estate leases, along with the ability to deduct input tax related to the construction and maintenance of the respective property.
2. These provisions replace Case d) of Paragraph 2 of Article 8 of the VAT Code.
- Point (i) emphasizes the mandatory application of VAT on the rental of industrial premises and safes.
- Point (ii) introduces the option to apply VAT to all professional real estate leases, contrasting with previous rules that allowed this option only for shopping centers and commercial centers under specific conditions.
A "Commercial Lease" is defined as any lease of real estate for conducting an economic activity by a taxable tenant.
