Abolition of the certificate for the application of reduced rates for renovation works on private dwellings
Renovation and repair works on dwellings older than ten or fifteen years are subject to the 6% reduced VAT rate under certain conditions. One of the conditions concerns the age of the house and its mainly use as a private residence.
In order to apply this reduced rate, a certificate also had to be available.
This certificate is now replaced by the following statement, which must be provided by the contractor on the invoices:
"VAT rate: In the absence of a written dispute within a period of one month from receipt of the invoice, the customer shall be deemed to acknowledge that (1) the works are carried out on a dwelling whose first occupation took place in a calendar year that is at least [fifteen or ten] years prior to the date of the first invoice relating to those works, (2) the dwelling, after carrying out those works, is used exclusively or primarily as a private dwelling and (3) the works are provided and invoiced to a final consumer. If at least one of these conditions is not met, the standard VAT rate of 21% will apply and the contractor will be liable for payment of the tax, interest and fines due in respect of these conditions."
If the customer does not dispute in writing within a period of one month that these conditions have been met, he will be liable for the correct application of the reduced VAT rate.
As regards the age of the private dwelling, the first occupation in the course of a calendar year at least [fifteen/ten] years preceding the first invoice relating to those operations must now be taken into account.
Similar provisions are provided for the application of the reduced rate to private residences for the disabled and institutions for the disabled.
This amendment will enter into force on 1 January 2022. The current certificate can still be used until 30 June 2022.
Furnished accommodation - maximum period three months
As an exception to a VAT exempt rental of immovable property, hotel services are in principle subject to 6% VAT. There was no legal definition of what should be understood as a hotel service, only an administrative position.
In order to avoid the concept of hotel services being interpreted too broadly, it will be defined as follows with effect from 1 July 2022:
The provision, for a period of less than three months, of furnished accommodation in hotels, motels and establishments with a similar function where paying guests are accommodated, where at least one of the following ‘closely related’ services is provided by the operator or by a third party on his behalf:
- Ensuring the physical reception of guests;
- The provision of household linen and its replacement at least once a week;
- Providing breakfast every day.
Abolition of the scheme of flat rate-assessment bases - Adaptation of the scheme for agricultural undertakings
As of 1 January 2028, all flat-rate bases of assessment will disappear. A specific arrangement will be introduced for agricultural companies that currently make the combination between the flat-rate agricultural scheme and another flat-rate scheme. This is to prevent them from no longer being able to use the flat agricultural schee. This is subject to a number of conditions.
VAT payers who already apply a flat-rate scheme on 31 December 2021 can continue to use it until 31 December 2027. For VAT payers, who do not yet apply the flat-rate scheme, this possibility will cease to exist as from 1 January 2022.
Refund of VAT for taxable persons established outside the EU
The procedure for obtaining a VAT refund will also have to be carried out electronically and under the same conditions as for EU-based VAT taxpayers.
Notification of actual use for mixed taxable person
Persons who carry out both VAT taxed transactions and VAT exempt transactions without the right of deduction (the so-called mixed taxable persons) calculate their VAT deduction in principle by using the general ratio (i.e. on the basis of the total VAT turnover in relation to the total turnover).
Authorisation may also be requested to apply the actual use, whereby the costs directly attributable to the VAT taxed activities may be fully deducted, taking into account the ordinary deduction limitations and exclusions. In addition, no deduction is possible for the costs directly related to the exempt activities. For the non-attributable costs a special allocation key must be determined in consultation with the VAT administration.
The VAT administration may also impose the application of actual use.
As of 1 January 2023, a mere electronic notification will be provided in case of an actual use choice.
Mixed taxable persons who already apply the actual use will also have to submit such an electronic notification, subject to a transitional period of six months from the entry into force of this amendment (i.e. before 30 June 2023).
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