Belgian VAT payers
Exemption system: conditions
Taxable persons established in Belgium whose annual sales in Belgium do not exceed €25,000 may benefit from the tax-free regime for supplies of goods and services carried out in Belgium (art. 56ter, §1er, CTVA). Annual turnover in Belgium is the total annual amount of supplies of goods and services, exclusive of VAT, made in Belgium by a VAT taxable person during a calendar year.
Application via form 604A
VAT taxpayers wishing to apply the tax-exempt scheme must notify the VAT authorities of this intention at the time of commencement of their business activity (using form 604A). The tax-free regime means that he does not have to charge VAT on his outgoing invoices. Nor does he have to file periodic VAT returns, nor can he reclaim VAT on his expenses. He is only required to file an annual list of taxable customers when he carries out transactions with Belgian VAT-registered customers.
Exclusion from the tax-free regime
It should be noted, however, that contractors, businesses operating in the horeca sector, traders in used and waste materials, and those supplying furnished accommodation are excluded from the scheme. The same applies to VAT units.
Mandatory information on your invoices! Since you are still subject to VAT, you must indicate to your customers on your invoices that you do not charge VAT by marking them “Régime particulier de franchise des petites entreprises” (“Special exemption scheme for small businesses”). This indication is mandatory.
What happens if you exceed the €25,000 threshold? In this case, you will be subject to the ordinary VAT system with immediate effect. From the moment you exceed this threshold, you must charge VAT to your customers (and you can also reclaim it).