The goods and services that a company issues are, in principle, subject to VAT.
VAT, or value-added tax, is a consumption tax paid by the end consumer. VAT is collected in successive stages, notably at the time of each transaction of the production and distribution process.
The standard VAT rate is 21%. However, the more advantageous rates of 6% and 12% apply to certain categories of goods and services.
Who is subject to VAT?
In principle, VAT applies to any person who regularly delivers goods or services:
- on a self-employed basis;
- on a for-profit or not-for-profit basis;
- as a main activity or as a side activity.
Some professions and occupations of a social nature are exempted from VAT (under Article 44 of the VAT Code). When requesting your VAT number, your Business Counter will examine whether you are eligible for an exemption.
Who can provide your VAT identification?
To obtain your VAT identification, you must request this from the VAT inspection office where your company is located. The addresses of local VAT offices can be found in the phone directory under SPF Finances, secteur Taxation TVA or on the fiscus.fgov.be website (available in French, Dutch and German).
The Business Counter can also request VAT identification on your behalf, for a fee. The amount varies by office.
If you are subject to VAT, you must fulfill a series of obligations:
- At start-up, in the event of a change or cessation of the activity, you must submit a declaration within onemonth to the VAT Control Office or via a Business Counter
- You must issues invoices for deliveries made and you must include the VAT. You must keep of accounts on the basis of invoices and a log of receipts (obligations vary according to VAT regimes)
- You must submit periodic VAT declarations (quarterly or monthly, as appropriate). A special VAT declaration for those subject to certain special regimes which do not require a traditional, regular declaration must be submitted.
- You must pay the VAT due for the past month or three months to the government
- You need to have an annual listing of customers affected
- You need to draw a statement of intracommunity transactions (with other EU countries)
The tax exemption scheme
Small companies providing delivery of goods or services (as specified in the VAT code) with an annual turnover of less than 25,000 Euros may opt for the tax exemption scheme.
The tax exemption scheme exempts the company from the majority of obligations required under the normal regime.
Therefore, the company:
- must not and cannot charge VAT on behalf of its customers
- must not pay VAT to the Treasury
- must not file regular declarations for VAT
However, the company cannot deduct VAT charged by its suppliers.
The company benefitting from the tax exemption scheme is required to respect a series of obligations.