VAT in Belgium
Belgian VAT Rates (TVA Belgium)
Value Added Tax in local language is "Belasting over de Toegevoegde Waarde" (BTW) – in Dutch – and "Taxe sur la Valeur Ajoutée" (TVA) – in French -. The Belgian VAT rates are:
- Standard rate: 21%
- Reduced rates: 12% and 6%
Belgium has opted for the reduced and super-reduced VAT rates on a number of items allowed by the VAT Directive (source: European Commission)
Belgium Vat Tax
Foodstuff0%, 6% and 12%
Pharmaceutical products6% and 21%
Medical equipment for disabled persons6% and 21%
Children´s car seats21%
Passenger transport6% and 0%
Books6% and 21%
Books on other physical means of support21%
Newspapers0%, 6% and 21%
Periodicals0%, 6% and 21%
Admission to cultural services (theater, etc)6%
Admission to amusement parks6%
Pay TV / cable21%
Writers / composers6% and 21%
Restaurant and catering services12%
Admission to sporting events6%
Medical and dental care21%
Shoes and leather goods6%
Clothing and household linen6%
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Deduction limits in Belgium
As a general rule, input VAT can only be claimed where the expenses are directly linked to the business activity of the company. In addition, an invoice must be generated according to Belgian invoicing rules and all other VAT return formalities must be met.
There are a number of items where the tax authorities only allow VAT deduction up to a certain limit. The following list provides some examples of specific VAT deduction limits:
- Conferences: 100%
- Accommodation and hotel: 0% (unless incurred by an employee providing goods or services away from business premises)
- Restaurants: 0%
- Car hire: 50%
- Car repair: 50%
- Taxi: 100%
- Bus: 100%
- Entertainment expenses: 0%
- Telephone: 100%
- Fuel for passenger cars used for business purposes, a maximum of 50%.
- Advertising: 100%
- Books and equivalent materials: 100%
- Business gifts: 0% (unless below the 50€ threshold)
Belgian statute of limitations
The statute of limitations is the period in which the authorities can go back to investigate a tax liability. This is normally the same period in which a taxpayer can go back to request a tax credit.
Input VAT should be claimed in a VAT return filed no later than the end of the third year following the end of the year during which the deductible VAT was claimable.
Regarding the obligation to pay VAT, the Belgian authorities have three years after the end of the year in which VAT became due to request the payment of VAT and related penalties. In some cases, this period may be extended or not apply, for example, if as a result of a VAT audit it is discovered that taxable transactions were not reported, or that VAT was incorrectly deducted.
- In case of fraud, the statute of limitations is increased to ten years. This is the time period the tax administration has to investigate back concerning tax liabilities.
- In case of the absence of VAT return submission or late submission, the statute of limitations is extended until the end of the fourth natural year following the year when the tax was due.
Belgian tax point rules
The tax point is the time when VAT becomes due. As a general rule, tax point arises in Belgium when the invoice is issued. If there is no invoice issued, the tax point arises the 15th day of the month following the month when the goods or services were supplied. Prepayments or advanced payments create a tax point. In these cases, VAT is due when the prepayment is made. There specific tax point rules for certain supplies of goods and services:
- Prepayments or advanced payments create a tax point. In these cases, VAT is due when the prepayment is made.
- Intra-Community acquisitions: Tax point occurs when the invoice is issued. If not issued, the tax point occurs on the 15th day of the month following the month in which the goods arrived in Belgium
- Intra-Community supplies: Tax point occurs when the invoice is issued. If not issued, the tax point occurs on the 15th day of the month following the month in which the goods left the country.
- Import: Tax point occurs when the goods are imported according to the relevant import documents.
- Continuous supplies of services: If periodic payments are made for the provision of services, the tax point arises at the end of the period to which the payment relates to. However, when the customer is liable to remit the tax based on the reverse charge mechanism in a B2B transaction, there are no periodic payments or invoices issued, and the service is rendered for more than a calendar year, the tax point occurs at the end of each calendar year.
- Vouchers: including prepaid phone cards, are considered as a means of payment in Belgium and are therefore treated as outside the scope of VAT.
VAT due should be distinguished from VAT payable. VAT is due when the tax point occurs. VAT is payable between the day after the end of the reporting period and the due date to submit and pay the VAT return.
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