Bad debt relief in Belgium
It is possible to reclaim VAT on bad debts in Belgium. The process is however not as simple as in other EU countries. A liquidator must have been appointed to manage the bad debts of the customer. Once appointed, the liquidator must receive a list of unpaid invoices. Once the invoices have been reviewed and the liquidator has determined that these invoices cannot be paid, he will issue a certificate allowing the company to recover the VAT paid to the authorities on the unpaid invoices. Only then it will be allowed to include this VAT as input VAT in the return.
In case of bankruptcy of the customer, input VAT can be directly deducted as from the date of official bankruptcy. Also, in case of other proceedings such as debt reorganization by the judge, the right to deduct arises when the Court decision is made.
More information is available (in French and Dutch) in the notice published by the tax authorities about Bad debts in Belgium.