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What does this guide contain?
The guide provides you with practical VAT information for Belgium:
- Your VAT registration in Belgium
- Your VAT obligations TVA in Belgium
- The invoicing rules in Belgium
- A VAT credit refund in Belgium
VAT REGISTRATION IN BELGIUM
When do you have to register for VAT?
It is mandatory for your company to apply for VAT registration with the Belgian tax authorities before starting your activities. Financial penalties may apply if the application for registration is submitted late.
The VAT expert's eye
There are possible derogations or scenarios to avoid or allow VAT registration.
Foreign businesses with local transactions for which the general reverse charge is applicable may decide to voluntarily register for VAT in order to recover Belgian VAT incurred on their expenses by means of a VAT return instead of the electronic procedure provided for in Directive 2008/9. This option is only applicable to foreign EU businesses with more than €10,000 of recoverable VAT per calendar year.
What documents do I need to provide when I register?
If your company wishes to register for VAT in Belgium, it is essential to contact the Belgian tax authorities. There is no need to contact the tax authorities in your country of establishment.
In particular, your company will need to submit the following documents:
- The VAT registration form(s) completed in the language of the country
- A copy of the articles of association
- An extract from the trade register
- A certificate of VAT liability
- Power of attorney (if using a fiscal agent)
- Proof of activity on the territory of the country concerned: a contract, an order form, etc.
The Belgian tax authorities may require some of these documents to be translated into French or Dutch.
How long does it take to get a VAT number?
If your file is complete, it usually takes between 2 to 8 weeks to obtain a VAT number.
Is a fiscal representative necessary?
In principle, non-European companies cannot register for VAT in Belgium themselves. They must do so through a VAT representative. This is a local company that will represent you towards the local VAT authorities. He is responsible for meeting all your VAT obligations, including those of which he has no knowledge. For this reason, the VAT representative may require a deposit (e.g. a bank guarantee) from you before accepting the representation assignment.
European companies are not obliged to appoint a VAT representative. However, to facilitate their relations with the local tax authorities, they may appoint a proxyholder (agent) to carry out the tax formalities on their behalf. In this case, it is not necessary to issue a bank guarantee. The company remains solely responsible for paying its VAT debts.
The VAT expert's eye
In combination with the general reverse charge mechanism applicable in Belgium, the possibility for an EU company to appoint a fiscal representative can be useful to avoid cash flow problems. Indeed, this mechanism makes the customer liable for VAT (instead of the supplier) provided that the latter is a Belgian company filing periodic returns or a foreign company registered for VAT in Belgium with a fiscal representative.
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VAT OBLIGATIONS IN BELGIUM
Is it necessary to keep VAT accounting ledgers?
Your company must keep ledgers sufficiently detailed to enable the application of VAT and its control by the Belgian tax authorities.
When do you have to file a VAT return?
The company is required to file a VAT return on a monthly basis. However, it can opt for a quarterly filing provided certain conditions are met.
The return must be filed electronically by the 20th day of the month following the end of the taxable period.
The VAT expert's eye
Member States set the duration of the taxable period at one, two or three months. However, they may set different periods provided they do not exceed one year. The VAT return must be submitted within a period to be determined by the Member States. This deadline may not be more than two months after the end of each taxable period (Art. 250 of the VAT Directive).
Do I have to submit an annual return?
The company is obliged to file electronically, once a year, a statement of customers identified for VAT purposes in Belgium by 31 March of the following calendar year at the latest.
The VAT expert's eye
Member States may require the taxable person to file a return containing all the data referred to in Articles 250 and 251 and concerning all transactions carried out during the previous year. This return shall include all the information necessary for any adjustments. They authorize, and may require, the return to be made by electronic means under conditions which they determine (Art. 261 of the VAT Directive).
What is the deadline for paying Belgian VAT?
The company must pay the VAT due at the latest on the 20th day of the month following the tax return period. Since 2021, no interim VAT installments are required.
The VAT expert's eye
Every taxable person who is liable for the tax must pay the net amount of VAT when filing the VAT return. Every taxable person who is liable for the tax must pay the net amount of VAT when submitting the VAT return. However, Member States may set a different deadline for the payment of this amount or collect instalments (Art. 206 of the VAT Directive).
When should the intra-EU statement be filed?
The company is obliged to file an electronic intra-Community listing at the latest on the 20th day of the month following the reporting period.
The eye of the VAT expert
A recapitulative statement is drawn up for each calendar quarter within a period and according to procedures to be determined by the Member States. However, Member States may provide for recapitulative statements to be submitted on a monthly basis. Member States may allow, and may require, recapitulative statements to be submitted electronically under the conditions they determine (Art. 263 of the VAT Directive).
INVOICING RULES IN BELGIUM
Does the invoice have to include VAT? Reverse charge?
As a supplier of goods or services, your company is normally obliged to issue an invoice with VAT to its customer. This is the general rule. However, there are many derogatory situations which transfer this obligation to pay tax to the customer himself. These situations are known as "reverse charge" situations.
The special reverse charge rules have been introduced in Belgium for foreign companies:
For supplies of goods:
The reverse charge is applicable to all domestic supplies of goods made by a business not established in Belgium, provided that the customer is a taxable person established in Belgium who files ordinary VAT returns, or a taxable person not established in Belgium with a VAT number as well as a VAT representative in Belgium.
For supplies of services:
The reverse charge is applicable to all domestic supplies made by a company not established in Belgium, provided that the customer is a taxable person established in Belgium who files ordinary VAT returns, or a taxable person not established in Belgium with a VAT number and a VAT representative in Belgium.
What are the mandatory mentions on an invoice?
The VAT Directive lays down the minimum information that you must include on your invoice. In some cases, countries may add additional compulsory information. Particular attention should be paid to the conversion rates when the currency used on the invoice is not that of the country in which the transaction takes place, and to the specific statements justifying the legal reason why VAT is not charged.
What VAT rate should be mentioned on an invoice?
Belgium has three different VAT rates:
- Standard rate: 21% (R03)
- Intermediate rate: 12% (R02)
- Reduced rate: 6% (R01)
For certain exceptional goods and services, the zero rate applies (R00).
VAT REFUNDS IN BELGIUM
How can I recover VAT in Belgium?
There are several methods to obtain refunds of Belgian VAT. The practical formalities for reclaiming foreign VAT will differ depending on whether or not your company is established in Europe and/or is identified for VAT in Belgium:
- If your company has a VAT number in Belgium, it will have to submit a refund application in the form and within the timeframe required by local regulations. In principle, the VAT credit is automatically transferred to the following month. However, an actual refund can be requested under certain conditions. The minimum threshold is €400 per quarter (or €50 annually).
- If your company is established in a European country and does not have a VAT number in Belgium, it will have to apply for a VAT refund electronically from its country of residence, in the form and within the time limits required by Directive 2008/9.
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If your company is established outside Europe and does not have a VAT number in Belgium, it will have to appoint a tax representative to submit its refund application in the form and within the time limits required by the 13th Directive.
Is Belgian VAT recoverable on all expenses?
VAT incurred on purchases, imports or intra-Community acquisitions of goods and services can be reclaimed by a foreign company provided that these expenses are for taxable activities and provided that the appropriate documentation is available.
No input VAT can be recovered on any of the following expenses:
- Entertainment
- Accommodation, hotel, catering and restaurants, unless (1) the costs are incurred for employees providing goods or services away from the business premises or (2) the costs are recharged to another business which in turn provides the same services
- Up to 50% of the input VAT incurred on passenger vehicles is recoverable. This restriction also applies to VAT charged on the supply of services and goods related to these cars (fuel, maintenance, etc.).
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