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Old 18.04.2018, 18:13
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Rent Deposit VAT

Hello everybody, which is the VAT art. to mention in the invoice issued for a rent deposit? "Not Subject to VAT as per art...."

Thank you,

Silvia
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Old 18.04.2018, 18:23
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Re: Rent Deposit VAT

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Hello everybody, which is the VAT art. to mention in the invoice issued for a rent deposit? "Not Subject to VAT as per art...."
Not subject to VAT as there is no transfer of ownership (deposit belongs to tenant) and no goods or service is rendered. It allready lacks of the definition in Art. 1 VAT Act. It is like asking where in the traffic law does it say a fish is not a vehicle. One could even argue the term "Invoice" is intially incorrect.
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Old 19.04.2018, 09:46
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Re: Rent Deposit VAT

Thank you for your answer. Basically I agreed with you that it's not necessary to issue an invoice in this case but for traciability I prefer to issue a document. What I would like to understand where I can read in the VAT law that this operation is not subject to VAT.
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Old 19.04.2018, 10:33
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Re: Rent Deposit VAT

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Thank you for your answer. Basically I agreed with you that it's not necessary to issue an invoice in this case but for traciability I prefer to issue a document. What I would like to understand where I can read in the VAT law that this operation is not subject to VAT.
There is no supply of goods or services, what is so hard to understand? Rent of a flat is generally not subject to VAT either, a parking space or commercial space possibly.
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Old 19.04.2018, 10:34
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Re: Rent Deposit VAT

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Thank you for your answer. Basically I agreed with you that it's not necessary to issue an invoice in this case but for traciability I prefer to issue a document. What I would like to understand where I can read in the VAT law that this operation is not subject to VAT.
As said in Art. 1 VAT Act. VAT is only due for payments on goods or service.

You would use "Not Subject to VAT as per art...." only for payments for service and goods which are normally taxable but for some reason are exempt. But a deposit is neither a payment for goods nor for a service and thus by virtue of its nature not subject to VAT.

As said it is like asking where in traffic law it says a fish is not a vehicle, or more appropriately where it says in the traffic law a fish cannot drive on the autobahn.

Deposit is also not subject to income tax because it is not a income. There is a corresponding payable in the books as the deposit is only held in trust.

Instead of an invoice send a payment request, if not all of the details are already stated in the rental contract. Once the deposit is paid hand out a receipt that the deposit was paid. "On date X amount Y was received as deposit for rental contract Z."

PS: You are aware that if the deposit is for a residential or commercial premises it must be put in a special bank savings account? (Art. 257e Code of Obligations). Customary in such a situation is to open the account and renter pays directly in the account. With this you avoid most of the hassle and bookkeeping issues.
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Old 19.04.2018, 10:37
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