The situation
A change of use of a building on which input VAT was deducted
A Dutch logistics group built regional offices in Eindhoven and Katowice and deducted the VAT on both. Four years on, the staff are moving out. The Eindhoven building will be let to a bank, the Katowice one to a mix of tenants, some of them without VAT.
Everyone knows part of the deduction may have to be repaid. Nobody has the years, the shares or the timing written down. The hours go on fixing the adjustment period in each country, the share of exempt use per year and when each correction goes in the return.
What the research has to settle
The rules behind the answer
- Deductions on capital goods are provisional
- The VAT Directive requires the deduction on capital goods to be adjusted when the use changes during the adjustment period. For immovable property, member states may extend that period up to twenty years.
- Both countries use a ten-year period
- The Netherlands and Poland both apply a ten-year adjustment period to buildings, counted from the year of first use. Each year, one tenth of the original deduction is tested against that year’s actual use.
- Exempt letting is the usual trigger
- Letting without the option to tax is an exempt use. Whether an option is available depends on the tenant and on national rules, so the result can change year by year as tenants change.
- A sale settles the remaining years
- If the building is sold during the period, the remaining years are generally adjusted at once, depending on whether the sale itself is taxable or exempt.
How it runs in azta
From the question to the document
The question, as you would type it
We deducted the VAT on offices built in Eindhoven and Katowice, both first used in 2022. From January, Eindhoven is let to a bank without VAT and Katowice is about 40% let to VAT-exempt tenants. What adjustment is due each year, and in which return?
You start with
A change of use of a building on which input VAT was deducted
- 01
Describe the buildings and the new use
Give the first-use dates, the original deduction and the planned tenancies. azta searches the VAT Directive and the Dutch and Polish VAT acts.
Cited research· Free - 02
Read the adjustment rules
Open each cited provision in the reader, in Dutch or Polish, to check the period and the timing of the correction.
Atlas statute reader - 03
Draft the memo
Ask for a memo per building with a year-by-year table and the return in which each correction is made. Edit it in Canvas.
Canvas · Ask azta· Pro - 04
Keep it with the group’s file
On Enterprise, keep the memo and the research in the group’s workspace, so the next change of tenant starts from the same file.
Workspaces· Enterprise You send
A memo on the capital goods adjustment, year by year
What you get
A memo on the capital goods adjustment, year by year
Tax memo · draft
Eindhoven and Katowice: VAT adjustment after the change of use
Eindhoven. The building has been used for taxed activities since its first year. From January it is let to a bank without VAT, which is an exempt use. For each remaining year of the adjustment period, one tenth of the original deduction is repaid through the return for the last period of the year.
Katowice. The share of floor area let without VAT decides the adjustment each year. On the planned tenancy, about 40% of the building is in exempt use, so 40% of one tenth of the original deduction is repaid for each remaining year, in the return the Polish rules prescribe.
If we sell. A sale of either building within the period would settle all remaining years at once. We should model that case before any sale is agreed.
Outcomes on your numbers
What azta is worth on this task
Pro pays for itself after
13 minutes a month
At €130 an hour, that is all the time Pro (€27 a month) has to take off your desk to cover its price.
Example figures. Replace them with your own.
- Hours back a year
- 22
- Capacity at your rate
- €2,808
- More capital goods adjustment memos a quarter
- 0.7
- Return on Pro
- 8.7×
- Research
- Drafting
- Your review
A scenario you set, not a promise. The hours that come back go to another client, or deeper into this one.
Want these numbers on your team’s real workload?
Book a demoSources azta searches here
- EUR-Lex · Curia
- wetten.overheid.nl
- Rechtspraak.nl
- Dziennik Ustaw
What stays with you
- The original deduction figures and the floor areas per tenant.
- The tenancy decisions, including whether tenants opt to tax.
- The entries in the VAT returns.
Frequently asked questions
- Does azta work out the adjustment amount?
- No. It researches the method and the timing and drafts the memo. The amounts come from your own figures and ledgers.
- Can it read our fixed-asset register?
- Yes, on Pro. Upload the register and azta refers back to the rows it relied on.
- Does the same rule apply to equipment?
- No. Movable capital goods have a shorter period. Ask about the asset and azta cites the period that applies to it.
