Indirect taxes & other taxes or tax measures

Belgian Tax reform – VAT

Latest update:  6 April 2020

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Belgian VAT update

Latest update : 18 December 2018

The Act of 14 October 2018 providing the option to charge VAT on the letting of immovable property has been published in the Official Gazette on 25 October 2018.

Option for renting with VAT

  • Both the property owner and the tenant must mutually agree upon the option to apply VAT and the tenant must use the immovable property for its business activity.
  • This option will be applicable to new buildings (or buildings considered as new further to renovation works) for which no VAT on real estate works (transactions referred to by article 19, §2, second paragraph) has become payable before 1st October 2018.
  • Soil-related studies and works (survey, sanitation, earthworks, and stabilisation), which are carried out before 1st October 2018, will not be taken into consideration and will not prevent from opting for the VAT application. Evidence of the starting date of building works will consequently be essential.
  • Renting of existing warehouses with VAT is also possible, provided more than 50% of the warehouse is used for storing goods. In addition, current rules would be relaxed and renting with VAT would also be possible where the building is partly used for sale (10% maximum).
  • For buildings rented with option, the VAT revision period would be set to 25 years.

For other buildings, the current 15-year revision period would be maintained. If a building initially falling within the 15-year revision period would be rented with option after this period has lapsed, the 15-year revision period would be regarded as final and would not be extended.

The explanatory statement also provides, for transfers of buildings, to set up a system similar to the transfer of a line of business to limit the negative consequences of VAT revisions.

Short-term renting always with VAT

Renting of buildings for a maximum 6-month period would automatically be liable to VAT (old buildings would also be targeted).

This new provision would however not apply to the following:

  • short-term renting of accommodation (main or secondary residence, holiday home, etc.) ;
  • short-term renting to natural persons acting for private purposes;
  • short-term renting to not-for-profit organisations;
  • short-term renting to welfare and cultural organisations referred to in article 44, §2 of the VAT Code.

In these cases, the user should provide a VAT status certificate.

Vouchers: Belgium published first comments on the implementation of the voucher directive

The administrative comments (circular 2018/C/127 of 7 December 2018) describe the VAT treatment of paying voucher which are applicable as from 1st January 2019 and in particular:

  • Which type of vouchers, paying cards, etc are in scope.
  • The definition of a Single Purpose Voucher (SPV) and the VAT treatment applicable.
  • The definition of a Multi Purpose Voucher (MPV) and the VAT treatment applicable.
  • Treatment of sales of vouchers between business operators.
  • The VAT recovery on non-redeemed voucher.

Voucher are widely used in the retail sector. It is now necessary to identify the type of voucher used by your business to assess whether the VAT treatment is adapted.