VAT: what every entrepreneur should know
VAT is a tax on consumption. In principle, a business does not bear it: it charges VAT to its customers, recovers the VAT paid to its suppliers and pays the difference to the State. Simple on paper, yet VAT remains one of the main sources of errors and reassessments in young businesses. Here are the essentials.
The principle in one sentence
You collect VAT on your sales, you deduct the VAT paid on your business purchases, and you pay over the balance. If deductible VAT exceeds VAT due, the difference is refunded or carried forward.
VAT rates in Belgium
| Rate | What for, in principle |
|---|---|
| 21 % | Standard rate: most goods and services. |
| 12 % | Certain goods and services, including restaurant meals (excluding drinks) and, since 2026, accommodation and takeaway or delivered meals. |
| 6 % | Essential goods (food, water, medicines), books, certain renovation work on homes, under conditions. |
| 0 % | A few special cases, such as certain newspapers and periodicals. |
Taxable, exempt or small business?
You charge VAT, deduct it on your purchases and file periodic returns.
Up to 25,000 € of annual turnover excluding VAT, you can invoice without VAT. In return, you cannot deduct VAT on your purchases.
Certain activities are exempt by law (healthcare, education, certain social services). No VAT charged, no VAT deducted.
A business carrying out both taxable and exempt transactions only deducts VAT in proportion to its taxable transactions.
The exemption scheme is not always worthwhile: if your customers are businesses that recover VAT, or if you invest heavily at the start, the normal scheme may suit you better.
Filing and paying: the calendar
Monthly or quarterly
Businesses with annual turnover of up to 2,500,000 € excluding VAT can in principle file a quarterly return. Above that, or in certain sectors, returns are monthly. Since the 2025 reform, quarterly returns and payment are due on the 25th of the month following the quarter, and monthly returns on the 20th of the following month.
Annual obligations
- The annual listing of VAT-registered customers, to be filed before 31 March.
- The EC sales list, for goods and services supplied to businesses in other Member States.
- Keeping sales and purchase journals, and retaining invoices for the statutory period.
What you can deduct, and what you cannot
| Expense | VAT deduction |
|---|---|
| Goods, equipment, software | Yes, in full if used for the taxable activity. |
| Car used for business | According to business use, and at most 50 %. |
| Restaurants and entertainment | No, save for exceptions. |
| Business gifts | Yes if the unit value does not exceed 50 € excluding VAT. |
| Mixed-use goods (private and business) | In proportion to business use. |
The invoice, the key document
The invoice is the basis for your customer's right to deduct and for your own VAT liability. It must include mandatory details: VAT numbers, date, sequential number, precise description, taxable amount, rate and VAT amount per rate. Since 1 January 2026, invoices between VAT-registered businesses established in Belgium must be electronic and structured, in practice through the Peppol network. A PDF sent by email is no longer enough.
Selling or buying abroad
For supplies of goods and most services between VAT-registered businesses, the customer in principle accounts for VAT in their own country (reverse charge). The invoice says so.
Above 10,000 € of distance sales per year across the EU, the VAT of the customer's country applies. The OSS one-stop shop lets you declare everything from Belgium.
Exports are in principle exempt, provided you can prove the goods left the EU.
VAT is due on import. With a licence, import VAT deferral avoids having to pre-finance it.
The mistakes we see most often
- Invoicing at the wrong rate, especially in hospitality and renovation.
- Deducting VAT on excluded costs (restaurants, private expenses).
- Forgetting the reverse charge on services bought abroad.
- Staying in the exemption scheme after exceeding the threshold.
- Filing late: the fine is due even if there is no VAT to pay.
- 1.Choose the right scheme at the start
Exemption or normal scheme: the decision depends on your customers and your investments.
- 2.Set up rates in your tools
Till, invoicing software, online shop: every product with its rate.
- 3.Keep a calendar
Returns, payments, annual listing: fixed deadlines, every year.
- 4.Keep the evidence
Invoices, transport documents, contracts: they protect your deduction in an audit.
This article is general and for information only. It does not constitute personalised tax, accounting or legal advice.
