Throughout the past few years, Belgium has witnessed several changes with respect to the rules to determine the chargeability of VAT.
According to the Belgian VAT legislation, the moment of supply of the goods or services makes VAT becomes due. In other words, the VAT amount becomes payable towards the Belgian Treasury.
In addition to this main rule, there are also a number of subsidiary causes for the chargeability of VAT. This means that certain events will give cause for the VAT to become due when they take place prior to the moment of supply of the goods or services.
These rules have been adapted several times in the past few years.
Before 2013, VAT was due when the invoice was issued or paid in case this event took place before the moment of supply of the goods or services.
As from 2013, the moment of issuance of the invoice no longer implied that the VAT on local supplies was due. In practice however, this gave rise to practical difficulties for VAT taxable persons. Therefore, the tax authorities decided to provide some administrative guidelines.
New key role of the invoice
As from 2016, the moment of issuance of an invoice regains its importance to determine the moment of chargeability of VAT on local supplies. In practice, the moment of chargeability of VAT is important as this determines in which periodic VAT return the VAT is to be reported.
Indeed, from now on the VAT is due at the moment of issuance of the invoice, irrespective of whether the supplier issues the invoice before or after the moment of the supply of the goods or services. VAT will in any case be due on the 15th of the month following the month in which the supply of the goods or services has taken place, if no invoice was issued before this date. Payment before the supply of the goods or services takes place also remains to be a subsidiary cause for the chargeability of VAT.
Furthermore, for the supplies of goods or services to ‘public bodies’ (B2G-relations), VAT is due upon receipt of the payment by the public body. This rule was adopted to avoid that the supplier needs to prefinance the VAT due. Of course, this system will not be applicable in situations where the reverse charge mechanism is applicable, as in that case there is no prefinancing of VAT by the supplier.