26 November 2014

From 1 January 2015, legal entities that fulfill a mandate as a company director or liquidator will have to submit their transactions to VAT (administrative decision E.T. 125.180 dd. 20 November 2014). This administrative decision results from a recommendation of the European Commission which questioned the optional VAT regime that applies until 31 December 2014.

The situation for natural persons who exercise a mandate as a company director or liquidator remains, for the moment, unchanged. They do not qualify as VAT payers.


The aforementioned legal persons currently have the choice not to be subject to VAT. In that case, they qualify for VAT purposes as non-VAT payers.

The reasoning behind this optional VAT regime is the analogy with natural persons acting as a director or liquidator of a company. In the regular exercise of their statutory mandate they operate in a subordinate relation to the legal entity that assigned their mandate. Towards third parties they are considered as an organ of the company and do therefore not act independently in the sense of article 4 of the Belgian VAT Code. As a consequence, they are not considered VAT payers for the purpose of their mandate.

Legal entities that under the “old” regime chose to submit their transactions to VAT are deemed to do this for every transaction they perform as such.

The choice made in, as a principle, irreversible and applies to all mandates as long as the legal entity does not provide irrefutable proof that the business economic situation has changed profoundly, justifying a revision of the initial choice. In such case, the legal entity must address its motivation to the local VAT inspection who will subsequently take a decision in this respect (administrative decision E.T. 118.288 dd. 27 April 2010).


The new VAT regime that will apply from 2015 onwards can have a substantial impact, not in the least on the VAT formalities which the legal entity will need to comply with. But also its clients may experience the impact, particularly if they have no right to input VAT deduction (or a rather limited right to input VAT deduction).

VAT will become due to all transactions made as from 1 January 2015, unless there is a subsidiary cause for the chargeability of VAT still in 2014 (i.e. payment before 2015).

The aforementioned principles apply to the regular directors’ remuneration. However these are to be distinguished from the variable remuneration of directors based on the company’s profit (so-called “tantième”).

The administrative decision further explains that in case transactions are remunerated by means of a “tantième”, the moment of chargeability of VAT is deemed to be the date of the annual shareholders meeting deciding on the attribution of the “tantième”, regardless of the closing date of the financial year. If the shareholders’ meeting is held in 2015, VAT will therefore in any case be due.


Alternatives exist to avoid the negative impact of the new VAT obligations. For instance, the setting up of VAT group, or the application of the special VAT scheme for small enterprises (to the extent that the annual turnover does not currently exceed EUR 15,000) or a director’s mandate in the hands of a natural person.

Effective and swift (before 31 December 2014) measures could therefore partially or entirely limit the financial impact for the year 2014 (and possibly also for the year 2015).


Should you have any further question or require a personal advice with respect to the impact of these rules on your company, please feel free to contact your usual contact person at BDO or you may send an email to [email protected] for the attention of one of the members of our Competence Centre VAT:

  • Erwin Boumans: 02/778.01.00
  • Pascal Dauw: 09/210.54.10
  • Kaatje Bondewel: 02/778.01.00
  • Brigitte Braeckmans: 03/230.58.40
  • Joëlle Teuwen: 081/ 20.87.87