VAT Rates in Belgium
Belgian VAT Rates
Belgium has opted for the reduced and super-reduced VAT rates on a number of items allowed by the VAT Directive (source: European Commission)
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.
Belgian use and enjoyment rule
Use and enjoyment rules can deviate the place of supply rules according to the country where the service is effectively consumed.
When applying the use and enjoyment rules, if the service is taxed in the EU, the non-EU supplier may have to register for VAT in Belgium.
We refer to negative use and enjoyment rules when the provision is intended to avoid non-taxation. We refer to positive use and enjoyment rules when intended to avoid double-taxation. Belgium introduced both, positive and negative provisions
The following services are subject to the “use and enjoyment” rule:
- Transport and connected services that take place outside the EU and are invoiced to a Belgian taxable person are not taxable in Belgium, and as such, considered outside the scope of Belgian VAT.
- Transport and connected services that take place in Belgium but are invoiced to a taxable person established outside the EU are taxable in Belgium, based on the “use and enjoyment” rule.
Find here the official circular Circular 2018/C/68 issued by the Belgian tax authorities introducing the use and enjoyment rule.
