VAT REGISTRATION IN BELGIUM
VAT identification is mandatory when the foreign company not established in Belgium carries out transactions for which it is liable for tax (transactions carried out with customers not identified for VAT purposes in Belgium) or for which it must complete reporting formalities in Belgium (intra-Community acquisitions, export supplies, intra-Community supplies, imports followed by an intra-Community supply known as “regime 42”).
When do you need to register for VAT in Belgium?
Foreign companies which carry out specific commercial activities in Belgium, may be required to submit VAT returns and consequently have to register for VAT purposes in Belgium. These companies should make sure that the Belgian VAT regulations are respected.
There are various situations where a VAT registration is needed:
- Importation of tangible goods ;
- Constructions or building services provided part of (raw) materials are coming from another EU Member state or provided the client is a foreign company not registered via a fiscal representative or a private individual;
- Sales of goods from inventory physically located in Belgium to other Member states;
- Selling goods to Belgian private individuals through Internet (e-commerce).
There are however derogations or possible scenarios avoiding or allowing a VAT registration. Foreign companies having local transactions for which the general reverse charge is applicable can decide to be voluntarily VAT registered to recover Belgian VAT incurred on their expenses through a VAT return instead of via electronic procedure as laid down by Directive 2008/9. This option is only applicable to EU foreign companies having more than € 10.000 of VAT recoverable by civil year.
Who assigns VAT numbers?
There is no single European VAT number. You have to apply for registration with each tax administration concerned, which alone has the right to assign a VAT number.
You will find the complete list of tax authorities here.
What documents do you need to submit?
Your company will need to submit the following documents together with duly completed and signed application forms:
- VAT registration form(s) completed in the language of the country
- A copy of the statutes
- An extract from the commercial register
- A certificate of VAT liability
- A power of attorney (if you use a tax agent)
- Proof of activity on the territory of the country concerned: a contract, order form, etc.
How long does it take to obtain a VAT number?
Obtaining a VAT number usually takes one month following the receipt of the above documents.
Are there any financial penalties if I do not submit my application on time?
It is compulsory for your company to apply for VAT registration before starting its activities. Financial penalties are applied if the application is submitted late or is incomplete.
VAT is normally due by the supplier of goods or the service provider (general rule). Where, therefore, a foreign company carries out taxable operations in Belgium for which it is liable for VAT, it must charge Belgian VAT to its client. In order to do so, it must register for VAT purposes either directly or either through a VAT representative.
- EU companies should register directly with the tax office for foreign companies. They can, however, appoint an agent to act on their behalf, nevertheless they alone remain liable for the tax.
- Non-EU companies should be registered with a individual VAT representative. The tax representative undertakes to complete the formalities required of the person who as appointed him (making the statement of establishment, book-keeping, signing turnover returns and paying the tax). The tax representative is legally responsible for meeting his obligations and legally liable for the tax owed. The tax representative has the same rights as all other taxable person.
Combined with the general reverse charge mechanism applicable in Belgium, the option for a EU company to appoint a fiscal representative can be useful in order to avoid cash flow inconvenience. Indeed, that mechanism makes the client liable for VAT (instead of the supplier) provided the latter is a Belgian business submitting periodical returns or a foreign company identified for VAT purposes in Belgium with a fiscal representative.
What is the local name of the tax?
Belasting Over de Toegevoegde Waarde - Taxe sur la Valeur Ajoutée [BTW, TVA]
What is the structure of the VAT number?
Belgian VAT numbers have 12 characters [BE + 10 digits]. The first number following the prefix is always "0". The last 2 digits constitute a control number.
VAT INVOICING RULES IN BELGIUM
Your company doing business in Belgium is subject to a single set of basic EU-wide invoicing rules and in certain areas, national rules.
Optional reverse charge for supply of goods
Reverse charge is applicable to all domestic supplies of goods carried out by a taxpayer not established in Belgium provided the customer is a taxpayer established in Belgium filing ordinary VAT returns or a taxpayer not established in Belgium having a VAT number as well as a VAT representative in Belgium.
Optional reverse charge for supply of services
Reverse charge is applicable to all domestic supplies of services carried out by a taxpayer not established in Belgium provided the customer is a taxpayer established in Belgium filing ordinary VAT returns or a taxpayer not established in Belgium having a VAT number as well as a VAT representative in Belgium.
See also our newsletter: "Reverse charge in Belgium : How to Apply it?"
Optional reverse charge (art. 194 of the VAT Directive)
Member States in which the VAT is due may provide that the person liable for the payment of VAT is the person to whom the goods or services are supplied where the transaction is carried out by a taxable person who is not established in the country in which the VAT is due.
Member States must apply a standard VAT rate [not lower than 15%] which must be the same for the supply of goods and for the supply of services. Member States may apply either one or two reduced rates [not lower than 5%] only to supplies of goods or services as listed in the Annex III of the VAT Directive.
Belgium has three different VAT rates. For outgoing transactions, each has its own section in the VAT declaration:
- standard rate: 21% (R03)
- intermediate rate: 12% (R02)
- reduced rate: 6% (R01)
For some exceptional goods and services, the zero rate applies (R00).
Information required in all cases
- Date of issue
- Unique sequential number identifying the invoice
- Customer’s VAT identification number (if the customer is liable for the tax on the transaction)
- Supplier’s full name & address
- Customer’s full name & address
- Description of quantity & type of goods supplied or type & extent of services rendered
- Date of transaction or payment (if different from invoice date)
- VAT rate applied
- VAT amount payable
- Breakdown of VAT amount payable by VAT rate or exemption
- Unit price of goods or services – exclusive of tax, discounts or rebates (unless included in the unit pri
Extra information required in some cases
- Exempt transactions – a reference to the appropriate (EU or national) legislation exempting it, or any other reference indicating it is exempt (at the choice of the supplier).
- Customer liable for the tax (i.e. under the reverse-charge procedure) – the words ‘Reverse charge’.
- Intra-EU supply of a new means of transport – the details specified in Article 2(2)(b) of the VAT Directive (e.g. for a car, its age and mileage).
- A margin scheme applies – a reference to the particular scheme involved (e.g. ‘Margin scheme — travel agents’).
- Self-billing (customer issues invoice instead of supplier) – the words ‘Self-billing’.
- Person liable for tax is a tax representative – their VAT identification number, full name and address.
- Supplier is operating a cash-accounting system – the words ‘Cash accounting’).
VAT OBLIGATIONS IN BELGIUM
When VAT registered, foreign companies have to deal with their VAT obligations, i.e. filing periodical VAT returns, keeping of books and records, VAT accounting, issuance of invoices, payment of VAT, invoices with mandatory information, etc.
How often are Belgian VAT returns required?
Your company has to report its VAT position by filing periodical VAT returns on a monthly basis (standard tax period). Quarterly reporting period can be opted for under conditions.
Where are Belgian VAT returns filed?
Periodical VAT returns must be filed by electronic means via "Intervat".
When should periodical VAT return be filed?
Periodical VAT returns must be filed before the 20th day of the month (20 of N+1) following the tax period (month/quarter) to which it relates.
The tax period shall be set by each Member State at one month, two months or three months. Member States may, however, set different tax periods provided those ones do not exceed one year. The VAT return shall be submitted by a deadline to be determined by Member States. That deadline may not be more than two months after the end of each tax period.
What is the payment deadline?
The VAT due should be paid by filing deadline for the VAT return - no later than the 20th day of the month after the end of the tax period (month/quarter) to which it relates.
Are interim payments required?
Any taxable person liable for the payment of the VAT must pay the net amount of the VAT when submitting the VAT return. Member States may, however, set a different date for payment of that amount. Member States may require interim payment to be made.
How often are ESL reports required?
The recapitulative statement (ESL) must be drawn up depending on the periodicity of the VAT return (month/quarter]). Foreign companies filing quarterly VAT returns have to submit the statement on a quarterly basis accordingly.
Where are ESL filed?
ESL should be filed by electronic means via "Intervat"
When ESL should be filed?
ESL should be filed before the 20th day of the month following the reporting period (month or quarter) to which it relates.
The recapitulative statement shall be drawn up for each calendar month. However, Member States, in accordance with the conditions and limits which they may lay down, may allow taxable persons to submit the recapitulative statement on each calendar quarter where the total quarterly amount of intra-EU supplies of goods does not exceed either in respect of the quarter concerned or of any of the previous four quarters the sum of € 50.000 or its equivalent in national currency. The recapitulative statement shall be submitted within a period not exceeding one month.
The Intrastat declaration is the legally obligatory declaration of cross-border goods movements between companies in the EU Member States. In Belgium this means the declaration of:
- The arrivals of goods in your company from other EU Member States and/or
- The dispatches of goods from your company to other EU Member States
What are the Belgian Intrastat declaration thresholds?
In Belgium, you are required to declare only:
- when your arrivals amount to € 1 500 000 or more per year and/or
- when your dispatches amount to € 1 000 000 or more per year
When should Belgian Intrastat be filed?
The Intrastat declaration is monthly. The deadline for submission is the 20th calendar day of the month following the reporting month, even if you submit an occasional or nil declaration.
Annual recapitulative statement
Foreign companies are required to file a yearly statement reporting taxable transactions (goods and services) with all taxable persons identified for VAT purposes in Belgium. The statement should be filed by electronic means via "Intervat" before March 30th of the next calendar year.
Member State may require taxable persons to submit a return in respect to all transactions carried out in the preceding year. That return shall provide all the information necessary for any adjustments.
In order to be able to apply VAT and make it possible for it to be checked, everything that you record in your accounts must:
- reflect the amount stated in the periodic VAT return;
- be substantiated by an accounting document.
The accounts must contain at least the following books:
- a book for incoming invoices and credit notes;
- a book for outgoing invoices and credit notes;
- a revenue ledger for each place of business (for all transactions with private individuals for which no invoice were issued);
- a centralised ledger if you have several places of business.
VAT REFUND IN BELGIUM
VAT incurred on the purchases, importations or intra-EU acquisitions of goods and services may be recovered by a foreign company provided these expenses are intended for taxable activities and at the condition that proper documentation is available.
No input VAT can be recovered on any of the following expenditures:
- Entertainment ;
- Accommodation hotel, catering and restaurants, unless (1) the costs are incurred for employees in charge of supplying goods or providing services away from the business premises or (2) the costs are rebilled to other business who in turn supplies the same services;
- Up to 50% of input VAT incurred on passenger vehicles is recoverable. This restriction also applies to VAT charged on the supply of services and goods related to such cars (fuel, maintenance, etc.).
A foreign company is allowed to deduct input VAT through periodical VAT returns. It is entitled to recover input VAT for the period in which the invoice is issued. The deduction of input VAT must be documented by an invoice that is issued in accordance with all Belgian VAT requirements.
Foreign companies which are not VAT registered in Belgium are allowed to recover Belgian VAT incurred on their expenses via the electronic procedure as laid down by Directive 2008/9 (for EU companies) or by 13th Directive (for non-EU companies).
Is any VAT credit automatically carried forward or refunded?
A VAT credit is in principle automatically carried forward to the next period, unless a tax refund has been applied for.
What is the minimum amount refundable?
In April 2021, the threshold for being refunded VAT credit have changed. Until now, to be eligible for a refund the amount of the credit had to be 615€ for monthly filers and 1485€ for quarterly filers. However, the amount is the same whether the declarant is monthly or quarterly .
The new amounts for VAT refunds are as follows :
- 400€ when the company files a quarterly VAT return instead of 615€
- 400€ when the company files a monthly VAT return instead of 1485€
- 50€ when the request is related to the last VAT period of the year regardless of whether the declarant files a monthly or quarterly return instead of 245€
- 50€ when the refund is requested in the monthly VAT return by a monthly declarant authorized for monthly refunds instead of 245€
- 50€ when the refund is requested in the monthly VAT return within the 24 months of the date of commencement of the economic activity by the monthly starter declarant instead of 245€
Where, for a given tax period, the amount of deductions exceeds the amount of VAT due, the Member States may, in accordance with conditions which they shall determine, either make a refund or carry the excess forward to the following period. However, Member States may refuse to refund or carry forward if the amount of excess is insignificant.
SPECIAL MEASURES FOR FOREIGN BUSINESSES IN BELGIUM
Is it possible for a company to pay the import VAT via the periodical VAT return?
Postponed accounting via the VAT return is possible under specific authorization (licence E.T. 14.000). A specific deferred payment for VAT purposes only is also applicable under conditions.
See also our Newsletter "Belgium : licence ET 14.000. What does it mean?"
Member States may provide that VAT on importation does not need to be paid at the time of importation on condition that it is entered as such in the VAT return to be submitted.
- Deferred payment means that the payment of the import VAT to customs is deferred for a nationally determined period. This is covered by Article 211, §1 of the VAT Directive which provides that Member States shall lay down the detailed rules for payment of the import VAT;
- Postponed accounting means that import VAT is accounted for and paid with other VAT obligations in the periodic VAT return. This is covered by Article 211, second paragraph, of the VAT Directive.
VAT Warehousing implemented in Belgium?
Belgium has introduced VAT warehousing regime applicable under specific conditions. In this case, the transaction is exempted and no VAT registration is required for the foreign company.
Member States may exempt the importation of goods and the supply of goods which are intended to be placed under warehousing arrangements other than customs warehousing.
According to Belgian law, immovable works including construction, repair, cleaning or maintenance works on an immovable property as well as transaction consisting in incorporating movable goods into immovable property, installation with a building of sanitary, fire, alarm, phone, electrical or air-conditioning equipment, embedded cupboards, stores and shutters, wall or floor-covering provided by a Belgian company are subject to local reverse charge if the recipient is either a taxpayer established in Belgium filing periodical VAT returns, either a taxpayer not established in Belgium but VAT registered through a VAT representative.
Member States which, at 01/01/1977, applied special measures to simplify the procedure for collecting VAT or to prevent certain forms of tax evasion or avoidance may retain them provided that they have notified the Commission accordingly before 01/01/1978 […] (art. 394 of the VAT Directive).