Belgium extends deadline for VAT recovery information obligations of mixed and partially exempt taxable persons

Taxable persons with a mixed or partially exempt VAT activity have been granted a deadline extension to provide the tax authorities with the mandatory yearly data on their input tax recovery method.

In Belgium, partially exempt businesses can determine their recoverable input VAT based on, either a global attribution method (“general pro rata”) or a direct/sectoral attribution method (“actual use” including “special pro ratas”). Taxable persons with part of their activity being outside the scope of VAT are required to use the direct/sectoral attribution method.

For partially exempt businesses, the chosen method needed/needs to be notified to the tax authorities by a strict deadline (30 June 2024 in the case of taxable persons already applying the global attribution method).

Additionally, the following data should be provided yearly, normally by 20 April:

• For the global attribution method: the final general pro rata percentage of the previous year and the provisional percentage for the current year.
• For the direct/sectoral attribution method, all for the previous year: the final general pro rata percentage (if applicable), the percentage of input VAT with no, full or partial recovery right, as well as any special pro ratas applied.

Exceptionally for 2024, partially exempt businesses applying the direct/sectoral attribution method need only provide estimates by July/August, and final figures by October/December (in each case depending on the frequency of returns filed, see the tax authority notice for details). For other taxable persons, the new deadline is July/August.

Key takeaway

Aside from meeting the (revised) deadlines, the use of the general pro rata method or a particular direct/sectoral attribution method, as applicable, should be reasonably defendable and appropriately documented. This will indeed be critical in view of future audits and possible litigation. The yearly filing of data points with the tax authorities is thus an opportunity to assess whether any action needs to be taken with respect to taxpayers’ input VAT recovery method going forwards.

Reference

• Gedeeltelijke btw-aftrek