The law of March 21, 2024, introduced significant modifications to the VAT exemption scheme for small businesses (Art. 56bis of the VAT Code and Royal Decree No. 19). Starting in 2025, this scheme, which allows small businesses to be exempt from most VAT obligations, will be accessible to businesses based in other EU member states, provided certain thresholds are met. Belgian businesses will also have the opportunity to apply this scheme in other EU member states, subject to similar conditions.
For Businesses Established in Belgium
Companies with an annual turnover in Belgium not exceeding €25,000 can benefit from the VAT exemption scheme for goods deliveries and services rendered in Belgium (Art. 56ter, § 1 of the VAT Code). This scheme allows companies to not charge VAT, not submit periodic VAT returns, and not recover VAT on expenses. An annual list of Belgian VAT-subjected clients must be submitted. However, note that unlike the standard regime, if no clients need to be listed on the annual client list, it is not necessary to submit a NIL declaration.
Exclusions
Certain activities are excluded from the exemption scheme, including:
Real estate work
Deliveries in the horeca sector requiring a receipt
Sale of used materials and waste
Transactions on new real estate
Intra-community deliveries of new means of transport
Sale of manufactured tobacco and seafood directly from fishing vessels in markets
Occult and illegal operations
Provision of specific furnished accommodations
For Businesses Not Established in Belgium but in Another EU Member State
Starting in 2025, companies established in another EU member state can also benefit from the VAT exemption scheme for their operations in Belgium, provided the following thresholds are respected:
An annual turnover in the EU not exceeding €100,000
An annual turnover in Belgium not exceeding €25,000
Exceeding either of these thresholds results in exclusion from the exemption scheme.
In Practice
A Belgian company with an annual turnover not exceeding the national threshold of €25,000 can apply the exemption scheme in Belgium. If this company also wishes to apply the exemption scheme for operations in other EU member states, it must ensure not to exceed the national threshold set by each concerned member state, as well as the EU-wide threshold of €100,000. If these thresholds are exceeded, the company will be excluded from the exemption scheme in those other member states.
To apply the exemption scheme in another member state, a prior notification is required.
Declaration Obligations
Companies must submit a quarterly declaration including:
The total amount of goods deliveries and/or services rendered in Belgium
The total amount of goods deliveries and/or services rendered in other EU member states
This declaration must be submitted within one month following the end of the civil quarter.
Leverage Our Expertise
These modifications provide new opportunities for small businesses by extending the exemption scheme to other EU member states. Companies must ensure they stay below the national and European thresholds to benefit from this advantageous scheme. We are here to help you navigate these new rules and optimize your tax benefits.
For any assistance or clarification on these new rules, please do not hesitate to contact us. Our team of experts is at your disposal to support you.
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