Some (Belgian) VAT news to kick off the new year

Dec 26
The new VAT chain: less dramatic than feared?

The tax authorities announced on their website that negotiations with the ITAA (Institute for Tax Advisors and Accountants) regarding the new VAT chain are still ongoing. To recap: with the introduction of the VAT chain, stricter oversight is being implemented on the timely filing of VAT returns and the payment of due VAT.


Confusion arose when the administration posted the "VAT calendar" for 2025 on its website, suggesting the new measures would take immediate effect. The tax authorities have since clarified this communication, stating that the following deadlines apply:

  • Monthly return for December 2024 and monthly IC submission for December 2024: January 20 (as before);
  • Quarterly return for Q4/2024 without a refund request and quarterly IC submissions for Q4/2024: January 27. In other words, the new (extended) filing and payment deadline applies here. Moreover, as an administrative tolerance, these are extended to the next working day (January 25 is a Saturday);
  • Quarterly return for Q4/2024 with a refund request: January 25.

Apart from these clarifications, negotiations with the ITAA are still ongoing regarding the impact of the new measures. This includes discussions about penalties, arrangements during the summer holidays, and more.

We will provide further updates as more information becomes available.



Reduced VAT rate for demolition and reconstruction (temporary measure) extended until June 30, 2025

Usually, the VAT rate for constructing a new home is 21%. However, those who demolish an old house and build a new one on the same plot can, under certain conditions, benefit from a reduced VAT rate of 6%. Until recently, there were two separate schemes for this:

  • Urban scheme: A permanent scheme applicable since 2007 in 32 cities, with no social conditions. It only required that the demolition and reconstruction occurred within designated urban areas. This measure applied only to works on immovable property (and not to the sale of reconstructed homes).
  • Temporary scheme: A nationwide measure introduced during the COVID-19 pandemic, allowing the reduced 6% VAT rate outside urban areas under certain social conditions. This scheme expired on December 31, 2023, and applied to both works on immovable property (demolition and reconstruction) and the sale of reconstructed homes.

From January 1, 2024, a new permanent scheme applies across Belgium. The VAT reduction is now primarily applicable to demolition and reconstruction works carried out for an individual’s sole and principal residence (subject to specific conditions). The reduced rate also applies to social rentals, such as through a social rental agency. As of June 1, 2024, the scheme has been expanded to include homes intended for rental for at least 15 years to individuals who immediately establish their residence there.

Two measures ended on January 1, 2024: the 32 cities scheme and the reduced rate for the sale of reconstructed homes. However, a transitional arrangement allows the continued use of these measures until the end of 2024, provided certain conditions are met, such as applying for a building permit before July 1, 2023 (for the sale of reconstructed homes) or January 1, 2024 (for the 32 cities scheme).

Due to delays caused by exceptional circumstances like heavy rainfall, the transitional arrangement has been extended by six months, now running until the end of June 2025. This extension provides builders and developers additional time to complete their projects while retaining the 6% VAT rate.

The Act extending the transitional arrangement for applying the reduced 6% VAT rate for the demolition and reconstruction of homes, dated December 10, 2024, was published in the Belgian Official Gazette on December 24.



New small business scheme

The Small Business Scheme (SBS) is undergoing a transformation in 2025. While the existing scheme with its €25,000 threshold remains in place, a new arrangement is being introduced, allowing businesses to benefit from SBS in other Member States. This will have a (limited) impact on the existing Belgian scheme. The new EU scheme (the "SME scheme") differs significantly from what we know: businesses will even need to apply for a specific "EX" VAT number.

The tax authorities have announced that the ‘Special exemption scheme for small enterprises (SME)’ module, enabling small businesses to register for the new SME scheme in one or more EU Member States, will only be available via the e-service Intervat starting March 3, 2025.

Until then, Belgian taxpayers wishing to conduct taxable transactions in another EU Member State from January 1, 2025, must contact the tax administration of that Member State (or register under the OSS scheme, if conditions are met) as soon as they start their new activity.

Belgian taxpayers already conducting taxable transactions in another EU Member State and already registered under the OSS scheme or identified there for VAT purposes must retain those registrations and continue to account for VAT on those transactions until the SME module becomes operational.


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