Belgium’s Parliament approved VAT administration reforms last week to assist businesses and reduce non-compliance. Once the King promulgates it, it will take effect on January 1, 2024. Three major reforms were approved: Credit refunds were improved, deadlines extended, and tougher fines were approved. The following are explanations for these three major reforms:
- Monthly refunds for monthly VAT return filers. Instead of waiting until the end of the quarter to apply for credit repayments, monthly taxpayers with the excess VAT can use it at the end of any month. This is currently only permitted with a special permit.
- Extension of the deadline for filing quarterly VAT returns. Both quarterly and monthly, Belgian VAT returns must be submitted by the 20th of the month following the period’s end. The proposals would only move the deadline for quarterly filers to the 25th of the month.
- Assessments and penalties for late VAT returns. After the deadline, late or missing VAT returns will be automatically assessed for VAT using a tax office-generated return assessment. The VAT charge will be calculated using the highest amount declared in any return in the previous twelve months. In the event of repeated non-submission, the VAT due will be increased on a sliding scale ranging from 25% to 200% of the VAT due. Taxpayers currently incur no late penalties until after the 10th of the second month following the end of the reporting period.
Effective date: 1 January 2024