AADE has issued Decision A.1046, introducing a method for input VAT deduction on immovable property used for both deductible and non-deductible activities. Taxpayers can now calculate VAT based on actual use, with applications submitted digitally and approval issued within 10 days. The decision applies from the tax year of application and may be retroactively applied to prior non-statute-barred years.
The Greek Public Revenue Authority (AADE) has issued Decision A. 1046 on 18 February 2026, introducing a specific method for the deduction of input VAT on immovable property used for both deductible and non-deductible activities. The decision covers VAT incurred on the purchase, construction, or improvement of such property.
Under the new approach, taxable persons may depart from the standard pro-rata method and instead calculate VAT deductions based on the actual use of each part of the property, ensuring a more precise determination of deductible input VAT.
Eligible taxpayers include those using, or intending to use, real estate for both VAT-deductible and non-deductible activities. A mandatory requirement is that separate accounting records must be maintained for inputs associated with each activity where the property is disposed.
To apply, taxpayers must submit a digital “Application – Notification” (Model I) via AADE’s My Requests platform. The application must be accompanied by supporting documents, such as a building permit, purchase contract, or title deed, demonstrating the exact square metres of each part of the property. The competent Tax Office (KE.FO.D.E. or D.O.Y.) is required to issue an approval decision within 10 days if the submitted details correspond with the tax registry.
Deductible VAT is generally apportioned according to the square metres used for each activity, excluding common areas. VAT incurred on common areas is allocated using the same square-metre ratio as the rest of the property. For parts of the property simultaneously used for both deductible and non-deductible activities, the deductible percentage is calculated using a fraction in which the numerator is the annual turnover (excluding VAT) from that part for deductible activities, and the denominator is the sum of that turnover plus turnover from the same part for non-deductible activities.
The decision is valid from the tax year of application until the taxpayer requests its termination. Any changes in the disposal of the property must be reported through a new application (Model IV), and VAT will be adjusted according to the general provisions of Article 38 of the VAT Code.
Although effective from its publication in the Government Gazette, the decision may also be applied retroactively to prior non-statute-barred tax years if the taxpayer maintained separate accounting records during those years. In such cases, applications must be submitted by 30 April 2026.
