BDO Indirect Tax News

Belgium - Latitude granted for notification requirement applying to mixed and partial VAT taxpayers

As from 2024, mixed and partial VAT taxpayers in Belgium must disclose certain information regarding their VAT deduction when submitting the VAT return. The annual notification requirement applies regardless of whether these taxpayers take a deduction based on the general pro rata method or based on the actual use made of the goods and/or services received.

Mixed VAT taxpayers are those that carry out taxed and exempt transactions (e.g., real estate companies and hospitals), whereas partial taxpayers are those that carry out transactions within and outside the scope of VAT (e.g., public bodies and holding companies). Neither mixed nor partially taxable persons have a full right to deduct VAT—they can only deduct VAT on their purchases to the extent the purchases are used for outputs on which VAT is payable.

The Belgian VAT authorities recently announced some relaxations of the administrative burden on mixed and partial VAT taxpayers:
  • Partial VAT taxpayers that qualify as large companies must report the information in their VAT returns on a trial basis. Public authorities (i.e., the state, communities, regions, provinces, agglomerations, municipalities and public institutions) that are considered “large enterprises” must provide the information if the public authority qualifies as a mixed VAT taxpayer for transactions in the VAT sphere and has elected to use the actual use method to determine the VAT deduction. No information is required for transactions where the public authority acts as a non-VAT taxable person (i.e., transactions carried out as a public authority that are outside the scope of VAT).
  • Both partial and mixed VAT taxpayers must communicate the necessary information on the application of actual use based on estimates in the June 2024 or Q2 2024 VAT return (filing due by 9 August 2024 under the summer scheme). Notification of the final figures was originally due in the November 2024 or Q3 2024 VAT return, but this obligation ceases to exist and no further data must be communicated for 2023. 
The VAT administration also confirmed that data on actual use in 2022 need not be communicated, nor are ratios relating to the free provision of goods (car, mobile phone, laptop) to a manager, director or staff member who can use the goods for private use.
  • The VAT administration will take a flexible attitude where VAT taxpayers make unintentional errors during 2024.

Mixed and partial VAT taxpayers should review their policies and procedures for taking a VAT deduction and ensure they understand the notification rules.

Erwin Boumans
Pascal Dauw
BDO in Belgium

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