Before making such a decision, it is worthwhile to familiarize yourself with the tax system in Belgium, in particular the way VAT is accounted for. Here is short Belgian VAT guide.
Obligation to register for VAT
In Belgium, the processing of any activity that involves the payment of VAT requires the registration of the company for VAT purposes. This is compulsory within 30 days of the first taxable activity. Foreign companies can register as non-residents and it is not necessary to set up a local branch for this purpose. A VAT representative is not required for entities originating in EU territories.
Registration via the website
Registration of a company for VAT purposes can be done via the website. A form 604a must be completed, which describes the circumstances of the registration. In addition, you will need to attach documents such as a copy of the extract from the commercial register, the status of the company, the certificate of registration as a taxpayer, as well as a copy of invoices or orders confirming the activity in Belgium. Registration is usually completed within 4 weeks, with a maximum of 2 months.
Structure of the Belgian VAT number
VAT number in Belgium consists of 12 characters. The first two are the BE code, which identifies the Member State of the European Union. The code is followed by 10 digits, of which the last 2 are check digits. Validity of a VAT number can be checked using the VIES system, which makes it possible to verify numbers issued by all EU countries and by Northern Ireland.
Various VAT rates in Belgium
Belgium has a standard VAT rate of 21%. It is applied to all goods that are not assigned to the other rates. A reduced rate of 12% covers, among other things, catering services and social housing. A second reduced rate of 6% applies to services such as the distribution of water, electricity, natural gas, as well as the use of cultural, entertainment and sports facilities. Intra-Community transactions are subject to VAT at a zero rate. A similar situation applies to medical services, as well as services related to education, banking and the sale of real estate.
Deadlines for the submission of VAT returns
As a general rule, VAT returns in Belgium must be submitted monthly. An exception applies to businesses with an annual turnover of less than €2,500,000.00. Such companies may file their tax returns on a quarterly basis, but this does not apply to trade in energy products, computers, telephones with accessories and vehicles. If a company is required to submit a monthly ESL recapitulative statement, it must also submit monthly VAT returns.
Possibility of a refund of VAT overpayment
If you have overpaid VAT in Belgium, you can apply for a refund. Otherwise, the excess will be carried forward to the next accounting period. However, it must be remembered that claiming a VAT refund is not possible for certain categories of expenditure. In addition, the tax refund is used in the first instance to settle any tax debt or other charges imposed by administrative authorities.
Assistance from professional tax offices
The tax system in Belgium is extensive, which is why many companies use the assistance of experts, including specialized consultancy firms. In this way, the need for frequent familiarization with changes in Belgian legislation can be reduced. A Belgian VAT guide can also be found on a number of websites. This allows you to increase the efficiency of your work and better plan the production and distribution of your companys products and services.
