Belgium: Circular Letter Provides Guidance on “VAT Chain” Reform

In an effort to modernize VAT procedures, the Belgian tax authorities have introduced several updates to the filing and payment processes under the "VAT Chain" reform. A circular letter issued on 28 January 2025 outlines these changes, with further clarifications provided in an additional announcement on 30 January 2025. These adjustments aim to address timing concerns raised by tax professionals and provide transitional measures for smoother implementation.

REVISED DEADLINES FOR VAT FILING AND PAYMENT

To streamline compliance, the filing and payment deadlines for VAT returns have been revised:

Quarterly VAT returns and European Sales listings: New deadline set for the 25th of the month following the reporting period.
Monthly VAT returns: Deadline remains unchanged at the 20th of the following month.

A key change is the temporary grace period for VAT filings due before 1 October 2025. If a deadline falls on a weekend or public holiday, it will be extended to the next working day. However, after this date, this extension will only apply to monthly VAT filers, while quarterly filers must adhere strictly to the 25th deadline.

Additionally, to qualify for a VAT credit refund, businesses must submit their returns by either the 20th or 25th of the month at the latest. The extension to the next working day also applies to VAT returns finalizing a substitute VAT return procedure and responses to tax authority requests for information.

The summer filing regime, which allows businesses to file June and Q3 VAT returns by 8 August and July returns by 10 September, will continue in 2025 and may remain in place in future years. However, this extension applies only to filing deadlines and does not impact payment due dates.

MODIFICATIONS TO PENALTY POLICIES

Late Submission of VAT Returns

No penalties will be applied to filings due before 1 October 2025 if submitted by the 10th of the second month following the reporting period.
After 1 October 2025, fines will be imposed for late filings. However, for a first-time offense, the fine may be waived upon written request, provided the return is submitted by the 10th of the second month after the reporting period.

Failure to File VAT Returns

Only infractions occurring from 1 January 2025 onward will be considered when determining penalties within the four-year reference period.

Late VAT Payments

Late payment fines will only be applied if the VAT remains unpaid after the 10th of the second month following the reporting period.
This grace period will not apply if the Belgian Treasury's rights are at risk or if there is evidence of taxpayer negligence.
Interest on late payments will still accrue from the first overdue day, but further clarifications are needed regarding how non-compliant taxpayers will be identified.

ADDITIONAL STRUCTURAL CHANGES

Discontinuation of VAT Accounts

Effective 1 October 2025, both the current account and the special account used for handling overdue VAT payments will be abolished.
Taxpayers filing before this date may request a full refund of their accumulated VAT credit. If no request is made, the remaining credit will be transferred to a provision account in October 2025.

Introduction of a New VAT Payment Account Number

From 1 October 2025, a new bank account (‘BE41 6792 0036 4210’) will be used for VAT payments.
Until this date, businesses must continue using the current VAT payment accounts. Any payments made to an old account after the transition will be automatically redirected.

Impact on Businesses and Compliance Considerations

Initially scheduled for enforcement on 1 January 2024, the VAT Chain reforms were postponed to 1 January 2025 to allow businesses and tax authorities sufficient time for preparation. However, the project has experienced further delays, contributing to uncertainty for taxpayers.

SUMMARY OF KEY CHANGES

CATEGORY	KEY UPDATES
Filing & Payment Deadlines	Quarterly VAT returns and European Sales listings due by the 25th of the following month. Monthly returns remain due by the 20th.
Grace Period	For deadlines before 1 October 2025, if the due date falls on a weekend or public holiday, it is extended to the next working day. This will no longer apply to quarterly returns after this date.
VAT Credit Refunds	Returns must be submitted by the 20th or 25th to qualify for a refund.
Summer Regime	June & Q3 VAT returns can be filed by 8 August, July returns by 10 September. Payment deadlines remain unchanged.
Late Filing Penalty	No fines for returns due before 1 October 2025 if filed by the 10th of the second following month. After that date, fines apply but may be waived for first-time offenses.
Non-Filing Penalty	Only infractions from 1 January 2025 onward are considered for penalties within the four-year reference period.
Late Payment Penalty	No penalty if VAT is paid by the 10th of the second following month, unless the Treasury's interests are at risk. Interest charges still apply from the first day of late payment.
Provision Account Changes	Current and special VAT accounts will be abolished from 1 October 2025. Remaining credits will be transferred to a provision account.
New Bank Account	A new VAT payment account (‘BE41 6792 0036 4210’) will be used from 1 October 2025. Old accounts remain valid until then, with automatic redirection after.
Implementation Delays	Originally planned for 1 January 2024, the reform was postponed to 1 January 2025, with further delays causing uncertainty.

Belgium: Circular Letter Provides Guidance on “VAT Chain” Reform

Important Changes to Belgian VAT Filing and Payment Rules

REVISED DEADLINES FOR VAT FILING AND PAYMENT

MODIFICATIONS TO PENALTY POLICIES

ADDITIONAL STRUCTURAL CHANGES

SUMMARY OF KEY CHANGES

SOURCES/ RECOMMENDED READ:

About Authors:

TAXSPOC News Desk