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Belgian VAT 2023 Updates

December 14, 2022

Due to new legislation, several aspects of the value-added tax (VAT) in Belgium will be altered in 2023.

 

Belgium VAT has made significant changes for 2023, including modifications to the reverse charge, interest rate for late payments, document retention term, and statute of limitations. Some of these modifications are a consequence of the November 10, 2022, passage of a new law incorporating various tax and financial provisions.

Reverse Charge on Construction Supply

From January 1, 2023, reverse charging will always apply when a Belgian-established firm undertakes to build supplies on immovable property, provided the buyer has a Belgian VAT number and makes periodic VAT returns.

If the consumer supplies a VAT number in Belgium but is exempt from filing periodic VAT returns, the domestic reverse charge does not apply. However, the supplier must include a notation on the invoice saying the client has one month to challenge the invoice in writing if the customer has yet to notify the supplier whether or not he is required to file VAT returns. The customer is responsible for paying the tax and any relevant penalty without additional communication after the deadline has passed.

Further, the latest clarification has significant implications for non-Belgian taxpayers: reverse charging in construction services applies even when the client is a non-established entity that is VAT registered in Belgium, whether directly or via a fiscal agent. Previously, this rule only applied to international firms that established a fiscal representative in Belgium as part of their registration process.

The following declaration must be included on all invoices from the suppliers:

"Reverse charge." In the absence of a written dispute within a period of one month from the receipt of the invoice, the customer is deemed to acknowledge that he is a taxable person liable to submit periodic returns. If that condition is not fulfilled, the customer is liable for payment of the tax, interest, and fines due in respect of that condition (new Art. 20, 3 RD No. 1).

 

According to the revision to Art, a client must disclose his valid VAT number to the provider as of January 1, 2023. 53, quarter 1, paragraph 1, of the Belgian VAT Code.

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Late Interest Rates

The rate applied to overdue payments is 4 percentage points over the basic interest rate.

 

The late interest rate should be added to the monthly taxes payable, rounded down to the nearest multiple of 10. Currently, the monthly rate is 0.8%. 

The rate of late payment interest for 2023 is set at 4%. The total interest rate for late payments in Belgium will be 8% in 2023. The moratorium interest is computed separately using the late interest rate minus 2%.

Keeping Records

The mandatory record retention time is increased from seven to 10 years.

Statute of Limitations

The standard three-year time restriction for filing a fraud claim is extended to 10 years. The IRS has this amount of time to look into past tax debts.

If a VAT return is not filed or filed late, the deadline for filing the return is extended from one year to four years until the end of the fourth natural year after the year in which the tax was due. As a result, there is a significantly longer window in which to levy fines and interest.

For more information or direct inquiry regarding International VAT and TAX compliance, contact Safari Star. We are glad to be of service. 

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