Belgium Proposes the First Phase of Tax Reform
The Finance Minister of Belgium has released the planned first phase of a tax reform which proposes VAT rate changes and the introduction of e-reporting and e-invoicing.
The effective date is yet to be finalized by the Belgian Ministry of Finance.
If the reform is adopted, the proposed measures about the VAT rate changes will likely be effective from January 1, 2024.
The planned phases of the mandatory e-invoicing would take effect as follows:
- Date: July 2024
Taxpayer category: Large taxpayers established in Belgium
Turnover Threshold: Annual turnover over 9,000,000 EUR in 2023
- Date: January 2025
Taxpayer category: Medium-sized taxpayers established in Belgium
Turnover Threshold: Annual turnover between 700,000 EUR and 9,000,000 EUR in 2023 or more than 700,000 EUR in 2024
- Date: July 2025
Taxpayer category: Other taxpayers
- Date: January 2028
Taxpayer category: Small companies and agricultural companies
The tax reform responds to certain public policy demands by introducing a 0% VAT rate for basic products such as fruits and vegetables, medicines, etc.
Secondly, the reform proposes replacing the two reduced VAT rates, which currently are 6% and 12%, with a single reduced rate of 9%.
In terms of narrowing the VAT gap and promoting simplification through digital and automated solutions, the proposal included the introduction of e-invoicing and e-reporting. The draft legislation about e-invoicing, published in 2022 and not yet approved, proposes a phased approach for B2B electronic invoicing starting from July 2024. The proposal outlines the planned timelines based on the annual turnover of businesses, with large taxpayers being the first to comply.
In addition to e-invoicing, the tax reform also proposes the introduction of e-reporting to eliminate the requirement for taxpayers to submit the annual 'Customer list return'.
This proposed tax reform is subject to further development, clarification, and approval.