Belgian Court of Cassation: no late payment interest without a VAT debit in the hands of the VAT taxable person

Written by Wouter Villette 13 April 2015


In its decision of 31 October 2014 (Jetaircenter NV vs. the Belgian State), the Court of Cassation ruled that late payment interest cannot be claimed by the Belgian State when the taxable person under review has no VAT debit.

Under the Belgian VAT legislation, late payment interest at 9.6% is legally due by the taxable person when the VAT amount is not paid to the Belgian authorities in time.

As regards VAT that has been unduly deducted by a taxable person, the Court of Cassation states, in contrast to the Belgian State, that late payment interest is only due insofar as – without such deduction – a VAT amount would have been payable to the Belgian State.

The decision of the Court of Cassation as such only allows that late payment interest is imposed on the “net-debt position” of the taxable person, taking into account the positive current account position of the VAT taxable person.

This means that late payment interest cannot be claimed when there is no VAT debit in the hands of the taxable person, i.e. no VAT payable to the Belgian authorities.

Bottom line: late payment interest is only to be imposed to compensate for any financial loss or disadvantage sustained by the Belgian Treasury.

What could this mean for businesses?

The above is relevant for all businesses in dispute with the Belgian tax authorities and running the risk of being imposed late payment interest as well as in the framework of an application filed by the taxable person for exemption from late payment interest resulting from the assessment notice.

For more details in respect of this case and information on how PwC can support you, please contact your regular PwC adviser.

Source: Cass. 31 October 2014, F.13.0031.N