Reduction of VAT on schools announced

On 16 October 2015, the Federal Council of Ministers announced that it would lower the VAT rate for school buildings from 21% to 6%.

The announced reduction has a broad scope of application, applying for kindergarten,  primary, secondary as well as university education, as well as for adult and musical education, in so far as the services offered do not have a purely recreational character.

Furthermore, the reduction applies (i) to the sale of (or establishment of other real rights on) school buildings, (ii) to construction works (including renovation, but with the exclusion of cleaning) and (iii) to leasing.

The Royal Decree bringing about this change has yet to be published. It was provisionally agreed that the reduction would enter into effect on 1 January 2016.

It remains to be seen whether this reduction is in accordance with the European VAT regulations. It is possible to apply a reduced rate only for the deliveries or services contained in annex III of the Directive 2006/112/EC of 28 November 2006. The sale or construction of schools isn’t included there, in contrast to e.g. social housing construction.

We will keep you informed if and when the Royal Decree is published. For more information on this topic, you can consult Ewoud Willaert (author).