VAT-liable rental of holiday homes
February 11, 2013 | 30,00 EUR | answered by Oliver Burchardt
We offer holiday homes on the Baltic Sea. We have agreed with the owners of the holiday homes, which are subject to VAT, to receive a commission of 20% + VAT.
Is it possible to structure the rental agreements with the tenants in such a way that 20% of the rental price (excluding VAT) is transferred to our account, and the remaining 80% is paid directly to the owners' account? At the end of the year, we would then settle the accounts with the owners;
e.g.
Commission €1,000
VAT €190,
total €1,190,
received (directly from the tenant) €1,000,
still to be paid (by the owner) €190.
OR should we choose a different method of accounting?
Dear inquirer,
Thank you for your inquiry, which I will gladly answer as part of an initial consultation.
Please note that the tax assessment is based on the information provided. Adding, changing, or omitting information may alter the result, possibly significantly.
Certainly, you can design contracts with tenants within the framework of contractual freedom. However, it is disadvantageous for you.
VAT is either due at the time of service provision (the usual case) or at the receipt of payment (under certain conditions). In your case, the VAT liability arose with the receipt of payment.
If you owe more than 1,000 EUR in VAT per year, the tax office will ask you to submit a monthly VAT pre-registration and pay the VAT due. In this case, you will have to pre-finance the VAT and only receive it back from the owners at the end of the year. The interest effects from this will remain with you.
Therefore, you should collect the full amount of money and credit and transfer 80% to the owner. This way, you ensure that you have also received the VAT to be paid.
Best regards,
Oliver Burchardt
Tax consultant
