Belgium: Qualitative evaluation of whether renovations constitute new construction for VAT purposes required
A court decision concerning whether renovations constitute new construction for VAT purposes
Court decision concerning whether renovations constitute new construction for VAT purposes
The Court of Appeal in Ghent held that a qualitative evaluation must be made as to whether renovations of an old building are so far-reaching and entail sufficient added value as to constitute new construction for value added tax (VAT) purposes.
The court rejected the quantitative criterion often applied by the VAT administration under which renovations are treated as new construction when the cost price, excluding VAT, of the works reaches at least 60% of the sales value of the building after the renovation.
Read a February 2023 report (Dutch) prepared by the KPMG member firm in Belgium
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