The Expert's eye
International associations are generally heavy consumers of a large number of services (consultants, lawyers, etc.) and therefore bear VAT on their expenses.
If your association's located in Belgium and it purpose is to represent and defend the interests of its members and it deducts VAT on all its expenses, then it is certain that the question of its VAT status will be put on the table during a tax audit. The tax authorities will attempt to reclassify the VAT status from that of an ordinary taxable person to that of an exempt taxable person and thus refuse to deduct VAT on expenses. It will also take advantage of the opportunity to apply an administrative fine of 10% on the amount of VAT wrongly deducted over the last three years as well as interest for late payment of 9.6% per year.
It is therefore in the interest of the international association to prepare its input VAT file very carefully in order to be able to demonstrate, through adequate documents (cost structure, Time sheets, activity reports, etc.) and to the satisfaction of the administration, its main purpose.