New Belgian legislation with important VAT changes in the pipeline!

On 3 October 2022, a new draft law containing various tax and financial provisions was submitted to the Parliament.

The draft contains some important VAT changes (mainly procedural aspects). Please find below a summary of the most important VAT measures:

There will be a new statute of limitation period of 4 years when VAT returns are not submitted (or not submitted on time), and 10 years in cases of fraud. These come in addition to the already existing periods of 3 or 7 years.

Late payment interest (currently at 9.6% annually) will be reduced via a link to the rates in other tax cases. More specifically, the late payment rate for VAT will always be 4% higher than the applicable rates for income tax (the latter is based on the interest rate for 10-year OLO bonds with a minimum of 4% and a maximum of 10%). For 2023, this results in a late payments interest for VAT of 8% on an annual basis.

The explanatory note underlines that VAT revenue represents almost 1/3 of tax revenues. Correct collection is therefore vital for the budget. This therefore justifies why the rate for VAT debts is 4 percentage points higher than the rate for other tax debts.

The interest payable by the State (moratorium interest) will systematically be 2% lower, bringing it down to 6% annually.

The retention period for keeping accounts, invoices and other records will be increased to 10 years.

Taxpayers who obstruct the tax authorities during VAT audits may face penalty payments in the future.

The new rules are scheduled to come into force from 1 January 2023. Please note that as this is draft legislation, changes may still be made as the legislative process is being finalised.