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The case of Denmark

Since July 01,  2023, Denmark has had a very strict new policy on late payment interests. Failure to pay Danish VAT within the legal time limit, for whatever reason, has resulted in the automatic application of retroactive interests on arrears of 8.4% per annum, whereas previously Denmark did not apply any penalties.

The case of Belgium

In 2023, Belgium reduced interests on late payment from 9.6% to 8% per annum. However, this interest may be reviewed each year.

The VAT expert's eye

There are many and frequent errors in VAT returns, which is perfectly normal given the complexity of the VAT rules. But correcting VAT returns, even in good faith, can be costly. Firstly, because these corrections attract the attention of the local tax authorities and can lead to a tax audit. Secondly, because the local tax authorities will want to apply fines and/or interests for late payment.

So the best way to avoid problems in a foreign country is to have complete control over the cycle of your operations (purchases and sales) from a VAT point of view, and to document all your internal procedures (purchase orders, tax codes, etc.) so as to avoid having to correct your VAT returns as much as possible.