All commercial leases are exempt from Value Added Tax (VAT) for the months of April, May and June, announced the Ministerio de Hacienda (Ministry of Finance).
The tax relief is applicable to all who pay rent for business premises, retail space, office space, a doctor, repair shop, for example.
To take advantage of the benefit, bot the lessee and lessor must be registered in the Single Tax Registry of the General Taxation Directorate, in the General Regime or the Special Agricultural Regime.
The exemption for the VAT includes leased property, real estate or good, the latter tangible or intangible, and that the expression “commercial activities” refers to all economic or profit activities in a broad sense.
For clarity, a person who leases a motorcycle to be used to make deliveries would be exempt from paying the VAT on the lease.
The exemption does not include rental of residential properties, which only pay the VAT on rents of ¢675,300 (currently) and above.
