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VAT Chain : Circular letter updates previously announced changes

Indirect Tax Alert | VAT Alert

The VAT authorities published a circular letter on 28 January 2025 clarifying the changes to the VAT filing and payment process that are part of the “VAT Chain” modernization project (Dutch/French). To address several timing issues raised by the tax profession, it was decided to reintroduce  certain previously existing tolerances. On 30 January 2025 the Administration has also published some additional communication (Dutch/French). More information on this VAT reform can be found in our previous issued tax alerts (‘Royal Decree implementing the VAT chain published’ and ‘Draft bill aimed at modernising the Belgian VAT chain introduced in the Chamber of Representatives’).

Extension until the next working day

Filing and payment

The VAT chain has extended the filing and payment date for quarterly VAT returns and quarterly European Sales listing until the 25th day of the month following the reporting period. The filing and payment for monthly VAT returns remain the 20th day of the month following the reporting period.

While initially there was no grace period, the circular letter now introduces a transitional period for returns with a statutory filing date before 1 October 2025: if the deadline falls on a Saturday, a Sunday or a public holiday, the filing date and payment date will continue to be extended until the next working day. For quarterly returns, this extension will cease to apply for returns with a statutory filing date after 1 October 2025, however the extension to the next working day remains in place for monthly filers. 

It should be observed that to obtain reimbursement of the VAT credit resulting from the return, filing needs to be done by the 20th or 25th at the latest.

The extension until the next working day also applies to the submission of the VAT return ending the procedure of the substitute VAT return and the response to a request for information. 

The so-called “summer regime”, allowing to file the June and Q3 VAT return and the July VAT return until respectively 8 August and 10 September, will be preserved in 2025 and possibly in the years to come.  This extension does not apply to the payment due that would result from these VAT returns.

Easement of the penalty policy

Late filing

No fine for late filing will be imposed for declarations with a filing date before 1 October 2025 if the submission is done by the 10th of the second month following the reporting period.

For declarations with a filing date as from 1 October 2025, a fine will be imposed. However, this fine will be waived upon submission of a written request in case of a first infringement if the return is filed by the 10th day of the second month following the declaration period.

Non filing

The administration has clarified that only infractions that have been committed as from 1 January 2025 are taken into account for the 4-year reference period which impacts the fines for non-filing.

Late payment

A fine for late payment will only be imposed if the VAT is not paid before the 10th of the second month following the declaration period. This tolerance does not apply in case the rights of Belgian Treasury would be compromised or when the factual elements indicate that the late payment is not due to circumstances beyond the taxpayer's control. Please note that late payment interests will be imposed from the first day of late payment.

This implies that non-compliant taxpayers who make late payments will be penalized with a fine for late payment from the first day of late payment. It is as yet unclear when a taxpayer will be considered non-compliant and which reference period is taken into account.

Other updates

Provision account

The current account, as well as the special account that is created in the event of late or non-submission of VAT returns or the non-payment of VAT liabilities will be abolished as from 1 October 2025.

For all periodic returns submitted before 1 October 2025, a full refund of the cumulative VAT credit can be requested by ticking the box for refund request in the return or a refund of the credit from the latest return can be requested at any time. If no refund has been requested, the cumulative credit in the current account will be transferred to the provision account as from the beginning of October 2025.

New bank account number

Only as from 1 October 2025, the new account numbers ‘BE41 6792 0036 4210’ will come into effect.  Until that date, all payments need to be made to the bank accounts currently in force. Payments made after 1 October 2025 to the wrong account number will automatically be forwarded to the new account number.

Impact

The VAT Chain changes were initially due to enter into force as from 1 January 2024, but the legislative deadline was postponed to 1 January 2025 to give both taxpayers and the tax administration enough time to adapt their systems. Recently, it has become clear that there is further delay to this project and the successive messages from the administration with clarifications and introducing varying tolerance periods and delays is prone to cause confusion among taxpayers. 

The circular letter lists the changes in an exhaustive ad practical way, but unfortunately does not take away all existing doubts on the practical effect.  

Taxpayers and the service providers supporting them should pay attention to the existing and upcoming guidance in order to adjust their (internal) bookkeeping processes and systems in line with the agenda put forward by the tax authorities.