Some of these changes result from the new update adopted on 10 November 2022. Below are the most significant changes that affect VAT compliance in Belgium.
Reverse-charge procedure for construction services
As of 1 January 2023, the reverse-charge will apply if a company established in Belgium provides construction services on immovable property to customers, holds a Belgian VAT number and regularly submits VAT returns.
This domestic reverse-charge does not apply if the customer has a Belgian VAT number, but is not obliged to submit regular VAT returns. However, suppose the customer has yet to inform the supplier whether he has to submit VAT returns. In that case, the supplier must indicate on the invoice that the customer has a period of one month to contest the invoice in writing. If this period has passed without further clarification, the customer is liable for payment of the tax and any penalties.
The current clarification also has important implications for foreign taxpayers: The reverse-charge for construction services applies if the customer is a business not registered for VAT in Belgium, regardless of whether it is registered directly or through a tax representative. In the past, it only applied to these foreign companies if they were registered in Belgium via a tax representative.
The invoices issuing the supplies shall bear the following endorsement:
“Reverse Charge: If no written objection is lodged within one month of receipt of the invoice, the acquirer shall be deemed to acknowledge that he is a taxable person obliged to file regular tax returns. If this condition is not fulfilled, the customer is liable for paying taxes, interest, and fines due to this condition (new Art. 20, § 3 RD No. 1)”.
Interest on late payment of VAT
The interest rate for late payments is calculated based on the base rate increased by four percentage points. The interest rate for late payment shall be applied to the total amount of taxes due each month, rounded down to a multiple closer to ten. The monthly rate is currently 0.8%. You can consult the official information from the tax authorities.
For 2023, the default interest rate is set at 4%. Thus, Belgium’s total default interest rate for the year 2023 is 8%. The moratorium interest shall be calculated separately based on the default interest rate minus 2%.
Retention of documents
The period for keeping records will be extended from seven to ten years. In addition, as of 01/01/2023, the amendment to Art. 53 quarter, § 1, paragraph 1 of the Belgian VAT Act will be in force, according to which the customer must provide the supplier with his valid VAT number.
The limitation period changes in two different cases:
- In the case of tax fraud, the statute of limitations is extended from seven to ten years. This is the period during which the tax administration can investigate tax debts.
- In case of non-filing or late filing of the VAT return, the limitation period is extended from one year to four years – until the end of the fourth calendar year after the year in which the tax was due. As a result, the period for imposing penalties and interest is significantly extended.
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