Rental part of own home

According to settled case law from the EU Court of Justice the concept of economic activity can be interpreted very broadly. The purpose or result of the economic activity should not be taken into account. When a business can be used for economic and private purposes, all operating conditions must be examined to determine whether the business is used to produce revenue.

The joint owners of a house rented out two non-independent spaces of the house to the company owned by one of the house-owners for use as an office and a meeting-room. The rental contract was entered into for a period of ten years. The owners opted for taxation of the letting. According to the Supreme Court under these circumstances the rental is considered economic activity, as laid down in the VAT guidelines 2006. The possibility of choosing for taxed letting also exists for portions of a property. This is also true when it comes to non-independent parts of a building that is used mainly for living. A mandatory exemption from VAT only applies to the rental of buildings and parts of buildings which are used solely for living.