The new VAT chain will come into effect in phases starting on 1 January 2025. One of the new measures is that the application for a VAT refund via the VAT return only relates to the credit on that return (schedule 72).

Because a VAT credit can only be refunded if it amounts to at least 50 euros, the tax authorities have provided a new validation rule in Intervat that the application for refund cannot be checked off if nothing or an amount of less than 50 euros is stated in schedule 72.

Until 30 September 2025, however, a transitional arrangement applies whereby the application for a refund of the VAT credit in the VAT return still relates to the full credit on the VAT current account.

However, the tax authorities had already activated the aforementioned validation rule in Intervat, which meant that those subject to VAT could not tick the request for a refund of the credit on their VAT current account if nothing or an amount of less than 50 euros was stated in the 72nd schedule.

The tax authorities have announced that the aforementioned validation rule has now been deactivated. VAT payers who have already submitted their monthly returns for transactions in January 2025 without being able to tick the request for a refund of their VAT credit can either modify their tax return until 20 February 2025 (correcting the VAT return), or make use of the option to request a refund outside of the tax return (by writing to the competent VAT office).

FPS Finance, news item, 18 February 2025

From 2024, the reduced VAT rate of 6% no longer applies to the sale of homes rebuilt after demolition that meet the so-called social conditions. The tax authorities provided a transitional arrangement for projects for which the environmental permit had been applied for by 30 June 2023, which has since been extended to 30 June 2025.

The Constitutional Court was asked whether charging 21% VAT on the sale of homes that meet the so-called social conditions after demolition and rebuilding does not violate the principle of equality and non-discrimination compared to the case where a builder can have a house demolished and rebuilt at 6% VAT if it meets the same so-called social conditions.

According to the Court, on the one hand, that sale and, on the other hand, the case in which a builder himself has a house built on his own behalf are not similar transactions. Nor does the new regulation discriminate against building promoters (who sell the houses) compared to contractors (who carry out the work for the builder). The difference in treatment between these two categories of VAT payers is sufficiently justified according to the Court.

Even though this judgement is less good news for property developers, the 6% VAT on the sale of houses rebuilt after demolition will soon be reintroduced. This plan has been included in the recent coalition agreement. The intention is to limit the maximum surface area to 175 square metres (instead of 200).

Const. Court, 20 February 2025

Since 1 January 2025, the new VAT chain will come into force in stages. In principle, the filing and payment deadline is no longer extended to the next working day if it falls on a Saturday, a Sunday or a legal holiday. But the tax authorities decided in January 2025 that this tolerance will nevertheless be maintained until 30 September 2025. For monthly declarers only, it will be retained even after that.
The quarterly VAT return and the special VAT return (629) relating to the fourth quarter 2024 could therefore be filed and paid until 27 January 2025.

But due to a technical problem, the tax authorities could not take into account the payments made between 24 and 27 January 2025, resulting in wrongly charged late payment interest. The tax authorities informed that the correction of this has been initiated and will be carried out as soon as possible. No action needs to be taken by the VAT payer himself or his representative.

If the full VAT amount was paid before 27 January 2025, the late payment interest will be cancelled in full.

If the VAT due was only partially paid before this date, the tax authorities will recalculate the late payment interest actually due.

And for VAT taxpayers who have already paid the wrongly imposed late payment interest, the tax authorities will offset the amount awarded in the next return.

Fisconetplus, news release, 10 February 2025

The publication on its website of the 2025 VAT calendar shows that the VAT administration is keeping his word. The explanatory memorandum to the VAT Chain Modernisation Act had already announced that as a result of the extension of the filing deadline for quarterly VAT returns to the 25th of the month following the quarter, the existing tolerances on filing and payment deadlines would be abolished.

This is not just about the tolerance that no penalty is imposed in case of a late VAT return filed before the 10th of the month following the month in which it was due. The new VAT calendar now shows that both the extension to the next working day if the deadline for submission and payment is a Saturday, a Sunday or a legal holiday, and the summer tolerance are also abolished.

The tax authorities do provide for a transition period until May 1, 2025. Until then, the extension of the filing deadline to the next working day will still apply. So for the VAT return for the fourth quarter 2024, VAT payers have until 27 January 2025 to file it and pay any amount due. Monthly taxpayers have until 22 April 2025 to file and pay their VAT return for the month of March 2025.

To get refund of any VAT credit arising from the VAT return, that return must be filed by the statutory deadline. No tolerances will be allowed on this from 1 January 2025. So the VAT return for the fourth quarter 2024 must then be filed by 25 January 2025, and that for March 2025 by 20 April 2025.

Finally, don’t forget that from 1 January 2025, the penalties for late filing and payment, among others, will also be adjusted. You have been warned.

Happy X-mas holidays!

A ruling by the European Court of Justice could drastically change the Belgian VAT revision rules for renovations. Possibly, the 15-year revision period could apply. This could obviously play to the advantage of the VAT payer if he can deduct additional VAT on renovations.

The Drebers case

Following the abolition on 1 January 2014 of the general VAT exemption for lawyers’ services, as a result of which these VAT payers were in principle entitled to deduction from that date, a law firm reviewed the VAT due on renovation works to the office building that was originally not deducted. In doing so, the VAT taxpayer took into account the review period for real estate assets, regularising 1/15 of the non-deducted VAT in its favour for 2014 and each subsequent year of that 15-year review period.

Since the renovation did not give rise to the creation of a ‘new’ building, the tax authorities argued that the five-year revision period applied, so the VAT taxpayer regularised a 90,000 euro VAT overpayment in her favour.

During the trial, the Ghent Court of Appeal was alerted by the VAT payer to a possible conflict of the Belgian regulation with the European VAT Directive. And that was apparently enough for the court to put two preliminary questions to the European Court of Justice. These boil down to whether the 15-year review period should also not apply to immovable works that result in a building that is not a ‘new’ building but have a similar economic lifespan as a ‘new’ building and, if so, whether the VAT payer can invoke that 15-year period before the courts on the basis of the direct effect of the VAT Directive.

The European Court’s ruling

The ECJ finds that Belgium has used the option provided by Article 190 of the VAT Directive to nevertheless consider services as capital goods if they have characteristics similar to those normally attributed to capital goods. Since ‘immovable capital goods’ are a special type of ‘capital goods’, that provision also applies to immovable capital goods, even if it is not expressly provided for in the legislative text.

Based on the file, the Court finds that the works carried out:

• have lasted for several years;
• led to a major renovation of the building in question;
• have also extended the building by adding a glass annexe and a lift shaft;
• have a cost of €1,937,104.

According to the court, the result of these works therefore appears to have the same economic lifespan as a new building, and the works themselves clearly resemble immovable capital goods rather than other capital goods.

In such a case, if the five-year revision period is applied to the renovation works, this could lead to a different tax treatment of those investments compared to a VAT taxpayer who has invested in the construction of a new building (15-year period), even if, given their economic characteristics, these investments are similar or even functionally identical.

Whether the building qualifies as a ‘new’ building for VAT purposes for the purposes of its supply, is irrelevant to the determination of the review period.

And finally, the Court confirms that if a Member State (in this case Belgium) erroneously does not classify such works as immovable capital goods, then a VAT taxpayer can rely directly on the VAT Directive before the courts in order to consider the works in question as immovable capital goods to which the extended revision period (in this case 15 years) applies.

Possible consequences

This Court ruling (C-243/23 dated 12.09.2024) may be of interest to VAT taxpayers who have exercised the so-called historical VAT deduction in recent years because their activity was initially exempted by article 44 of the VAT Code, but at some point became taxable with VAT. It is important to check carefully whether the five-year period was not wrongly applied and therefore more VAT could have been recovered. This can still be rectified today, but obviously only insofar as the right to the revision is not yet expired.

Feel free to contact us for assistance in such files. This could include, for example, files where historical VAT deduction was exercised in 2022 on a building whose provision has been considered, since 1 July 2022, as the provision of accommodation subject to VAT and no longer as an exempt real estate rental. But also other cases where the use of a renovated building was changed in 2021 or later, allowing a VAT revision in favour of the VAT payer.

If VAT deducted on renovations has to be partly refunded (e.g. sale with registration duty of the renovated building), this ruling could mean that more VAT has to be refunded than under the five-year review period.

We look forward to the tax authorities’ reaction.

As per annual custom, the tax authorities are also granting postponements for various VAT obligations this summer.

VAT return

The monthly declarations for the transactions of June 2024 and the quarterly declarations for the transactions of the second quarter 2024, instead of being filed by 22 July 2024, must be filed by 9 August 2024 at the latest.

Monthly returns for July 2024 transactions, instead of being filed by 20 August 2024, must be filed by 10 September 2024 at the latest.

VAT refunds

Monthly declarants entitled to monthly VAT refunds (pursuant to licence or start-up scheme) should take into account the following filing dates to avoid delaying the refund:

• declaration for June 2024 operations: submission no later than 24 July 2024;
• declaration for July 2024 operations: submission no later than 24 August 2024.

Also make sure your bank details are known.

European Sales Listing

The European Sales Listing for the transactions of the second quarter 2024 or the transactions of the month of June 2024 must be filed at the latest on 9 August 2024 (instead of 22 July 2024); that for the transactions of July 2024 at the latest on 10 September 2024 (instead of 20 August 2024).

Payments

For payments, the tax authorities do not allow any postponement. Those due dates therefore remain 22 July 2024 (second quarter 2024 or June 2024 declaration) and 20 August 2024 (July 2024 declaration). If the VAT due is not paid on time, default interest will automatically be charged to the current account. Of course, VAT payers may take into account an available credit balance on their current account when making payments.

On Thursday evening, Feb. 1, 2024, the Chamber adopted the draft law that will provide for an obligation to issue structured electronic invoices for many B2B cases as of 2026. Belgian VAT payers who are not themselves subject to this invoicing obligation will also have to be able to receive such structured electronic invoices from their suppliers.

To introduce this obligation, Belgium still needs the approval of the European Council, as the VAT Directive does not allow for such an obligation. The request for this derogation was delivered to the services of the European Commission last October. It is assumed that Belgium will receive this permission because a number of other member states have already obtained such a derogation.

Following thorough discussions within the VAT Committee on the ruling of the European Court of Justice in the Vega case (C-235/18 dated May 15, 2019), Member States have almost unanimously agreed that in a lot of cases the issuer of a fuel card does not supply fuel but provides a financial service (VAT Committee guideline 1068).

However, the card issuer will be deemed to purchase and sell the fuel itself if the following conditions are met:

• The card issuer must take ownership of the fuel – this includes also bearing the financial risk towards the supplier if the cardholder does not pay in the end, also bearing the risk for the losses the cardholder would incur if there were something wrong with the fuel and the issuer setting its own prices towards the cardholder.
• It must be the same fuel that is purchased and sold.
• There must be an agreement between the card issuer and the fuel supplier whereby the issuer acts on behalf of the supplier or on behalf of the cardholder and where there is no reference to the granting of credit or the administration of fuel delivery.

Importantly, these new guidelines do not apply to the past. We can assume that the Belgian administration will adopt and comment on these views in a yet-to-be-published circular within the near future.