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Your contact person for this topic:
Thomas Hermie
Tax lawyer
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Contact:
- +32 11 29 47 01
- t.hermie@euregio.law
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Further publications on this topic:
- E-commerce in Belgium: VAT regulations
- Status of VAT modernization and e-invoicing
- EU reaches agreement on new ViDA proposal to modernize the VAT system
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More on this topic:
- VAT
Starting 1 January 2025, the VAT exemption regulation for small businesses will change. It will be extended from a strictly national scheme to an EU-wide (optional) exemption.
From this date, Belgian companies with limited turnover will also be able to carry out their activities in other EU Member States free of VAT. This also means that no local VAT number and submission of a local VAT return are required. Conversely, foreign companies based in the EU can also carry out their activities in Belgium without charging Belgian VAT, thus avoiding VAT registration in Belgium. Companies not established in the EU will still not be able to benefit from this exemption scheme (even if they have a permanent establishment in an EU Member State, this is not sufficient).
National VAT exemption in Belgium until 31.12.2024
Until the end of 2024, companies can only apply the VAT exemption scheme for small businesses in the EU Member State in which they are established. Belgian companies can exempt transactions that are generally subject to VAT in Belgium from VAT, provided their annual turnover does not exceed 25.000 EUR. When assessing whether this threshold is exceeded, certain VAT-exempt transactions must also be taken into account, e.g. exempt property rentals, exempt export and intra-Community supplies and certain insurance and financial transactions. If it has opted for this, the company does not have to charge VAT and does not have to submit periodic VAT returns in Belgium, but only an annual customer list. Logically, it cannot claim VAT on its purchases.
Organizational bodies, i.e. companies that are active in the real estate sector (including letting), the catering industry or the waste sector, can never opt for this.
From 1 January 2025 onwards: EU VAT exemption possible
1. Compliance with double turnover threshold
- You remain below the local threshold in the Member State of establishment (European rules allow a national threshold of up to 85.000 EUR – Belgium has set this threshold nationally at 25.000 EUR, which is the current threshold for the existing national exemption scheme). For foreign companies, the same threshold applies as for companies based in the country concerned. Member States may provide that if the national threshold is slightly exceeded, the exemption scheme will continue to apply until the end of the calendar year. Belgium allows the regulation to continue to apply until the end of the calendar year for a maximum overrun of 10% of 25.000 EUR. If this 10% is also exceeded, the company immediately loses the exemption.
- In addition, you must remain below the EU overall threshold, which allows a maximum EU-wide turnover of 100.000 EUR. No tolerance is possible here. Exceeding this threshold leads to the immediate loss of the cross-border exemption regulation.
2. Prior notice
To benefit from the national tax exemption for small businesses and apply it in an EU Member State other than Belgium, you must apply to the Belgian VAT administration in advance. In the application, you indicate the EU Member States in which you wish to benefit from the tax exemption for small businesses and must prove that you fulfil the conditions. As a result, the Belgian VAT number will be extended by the suffix „EX“ (BE 0123.456.789 EX). On the other hand, foreign companies wishing to make use of the tax exemption scheme in Belgium must inform the VAT administration in their home country in advance. The foreign small business does not have to apply for a Belgian VAT number, but it must obtain and use the suffix ‚EX‘.
3. VAT returns
In order to apply the scheme in other EU countries, a VAT return must be submitted no later than the end of the month following each quarter in which the turnover is reported in Belgium and in every other EU Member State (including a „zero“ turnover). If this is forgotten, the application of the cross-border tax exemption scheme is generally cancelled.
Belgian small businesses must also still submit an annual customer list. From 2025, this annual customer list must also include the total turnover, i.e. not only sales to customers with a VAT number. Vehicles registered abroad (e.g. the Netherlands) and not used in Belgium for more than one month are exempt from the obligation to register in Belgium.
Do you have a question or concern?
Do you have questions about VAT in Belgium? Feel free to contact our VAT lawyer Thomas Hermie. By e-mail to t.hermie@euregio.law or by phone on +32 11 29 47 00.
