Renting commercial real estate in Slovenia/EU and VAT

Renting commercial real estate in SloveniaEU and VAT

Renting commercial real estate in Slovenia – good business idea!

Renting commercial real estate in Slovenia is a for-profit activity, which is generally exempt from VAT. So VAT is not charged to the tenant. How can you use if for your business in Europe?

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Renting commercial real estate in Slovenia is exempt from VAT

Pursuant to Article 44 of ZDDV-1 (Value Added Tax Act), renting of commercial real estate is, as is the case with most other real estate, exempt from VAT. But there are some exceptions.

The VAT at the prescribed rate is charged for:

  • stay in hotels or similar accommodation facilities, including stay in holiday homes, holiday camps or on campsites;
  • rental of garages and vehicle parking areas;
  • rental of permanent equipment and machinery;
  • renting of safes.

If the taxable person rents out real estate in accordance with the stated exemption for this activity, he cannot deduct input VAT paid to suppliers in connection with this real estate. We are also posting news on this topic on Facebook and Instagram.

Information on new construction in Slovenia/EU in 2020

When is the renting of commercial real estate a subject to VAT?

Despite the exceptions above, the lessee has the option of charging VAT (in accordance with ZDDV-1) if some conditions are met:

  • the lessee of business premises must be a taxable person with a valid VAT ID number
  • the lessee will use the business premises to perform the taxed activity
  • also, the lessee can deduct all input VAT
  • before handing over the real estate, the landlord and lessee have signed a statement on the VAT calculation (Article 45 of ZDDV-1).

If he meets all the above conditions, the landlord can also charge the VAT on renting commercial real estate at the prescribed rate, and the tenant can, of course, deduct it. In this case, the taxable person, the landlord, also has the right to deduct the input VAT he pays for the maintenance, investments and costs of this business premises.

Our legal experts can help you understand the law for renting commercial real estate. You can write with your query to

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The VAT rate

In the case of the lease described above, you charge the VAT at the general rate, ie at 22%. However, only subject to the conditions set out in the previous paragraph.

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