• Some VAT changes to
    harmonise regulations

Some VAT changes to harmonise regulations

08 November 2022

The federal government announced a series of tax measures in September. A draft law containing various tax and financial provisions contains, in addition to the promised energy measures, some important VAT changes. They are mainly intended to harmonise the regulations with those applicable in income tax and also to update certain rates.

Extension of retention and prescription periods

To ensure equal treatment between VAT and direct taxes, the following deadlines will be amended:

  • the retention period for invoices, books and other records is to be extended from 7 years to 10 years;
  • the prescription period in case of late or non-filing of VAT returns is to be extended from 3 years to 4 years; and
  • the prescription period for fraud is to be extended from 7 years to 10 years.

The changes to the above deadlines apply to VAT that becomes due from 1 January 2023. VAT that became due before 1 January 2023 will remain subject to the current retention and prescription periods.

 

Reduction in late payment and moratorium interest

To put an end to the multiplicity of interest rates of late payment and moratorium interest for VAT, a uniform rate will be imposed, which is 4% higher than the rate applicable to other debts managed by the FPS Finance.

More specifically, the late payment interest rate (i.e. interest owed by the VAT taxpayer to the Belgian Treasury) will henceforth amount to 8% (for the year 2023). This is the basic interest rate of 4%, in accordance with Article 2, § 2/1, first paragraph, 1° of the Act of 5 May 1865, plus 4%. If the basic interest rate rises to 5%, the late payment interest will rise to 9% .

Moratorium interest (i.e. interest owed by the State to a VAT taxpayer) will systematically be 2% lower than the applicable default interest. Consequently, for the year 2023, moratorium interest will be 6%.

If the administration does not have the necessary data to pay the return or refund, the moratorium interest will also not be paid.

The changes to late payment and moratorium interest will take effect from 1 January 2023. Consequently, these interest rates only apply to VAT that has become due from 1 January 2023. VAT that became due before 1 January 2023 will continue to be subject to the current (and higher) late payment and moratorium interest rates.

 

Possibility of imposing penalty payments

Taxpayers who fail to fulfil their obligations during a VAT audit or obstruct the conduct of the VAT audit may face penalty payments. A penalty payment may also be imposed if the VAT audit is carried out at the request of a State with which Belgium exchanges VAT information.

The possibility of imposing penalty payments will enter into force on the 10de day following the publication of the new law in the Belgian State Gazette.

 

How can we help you?

BDO can assist you in case of a VAT audit. But before it comes to that, we can of course perform a VAT scan evaluating the VAT treatment of key incoming and outgoing transactions.

 

Contact

Do you have any questions on these new measures? Our VAT experts are available for further advice or assistance. Please email [email protected] for the attention of one of the members of the VAT team: