Belgium: The Belgian government also intends to, officially, make B2B e-invoicing mandatory

Introduction

Many other European and non-European countries preceded Belgium on the e-invoicing topic. This, together with the EU Commission proposal “VAT in the Digital Age” (click here), pushed Belgium to also introduce a set of rules on mandatory B2B e-invoicing. According to the draft text, the key drivers for this are (i) an administrative simplification (less ‘red tape’), resulting  in reducing costs and enhancing the processing of invoices and (ii) closing the VAT gap (click here), which should lead to an increase in terms of VAT collection by the VAT authorities.

What is an e-invoice?

The B2B e-invoicing rules are based on the B2G e-invoicing rules that already exist for a few years now for public procurement tenders (click here and here). Also for VAT purposes, an e-invoice will be defined as “an invoice that has been issued, transmitted and received in a structured electronic format which allows for its automatic and electronic processing”.

Belgium will put forward the PEPPOL-BIS format as the standard to be used. But parties can freely decide to deviate from this, a long as (i) they both agree to it and (ii) at least use a format that meets the European standard on semantics and syntax EN 16-1931.

When must an e-invoice be issued?

In order to fall in scope of the B2B e-invoicing rules, three criteria should be met simultaneously.

1.The issuer of the e-invoice must:

• Be VAT established in Belgium.
  • A foreign entity having a VAT fixed establishment also qualifies as being VAT established in Belgium.
• Be VAT registered in Belgium.
  • Including:
    • a VAT person benefiting from the small enterprises exemption (turnover not exceeding €25.000)
    • Agricultural enterprises benefiting from the “forfait” regime thereto.
    • VAT groups, albeit that the member of the VAT group will have to issue the e-invoice under the sub-VAT number it was granted individually (so not using the VAT number granted to the VAT group).
  • Excluding:
    • VAT persons benefitting from a “forfait” regime other than the agricultural scheme.
    • VAT persons declared bankrupt “failliet”.
    • VAT persons benefitting from a VAT exemption provided for in art. 44 Belgian VAT code. Eg.: medical healthcare, school education, real estate services, financial services, etc. This egardless whether such a transaction entitles them to an input VAT recovery right (eg. granting a loan to a non-EU recipient).

2. The recipient of the e-invoice

• Being established in Belgium is not relevant. Foreign entities are also in scope.
• Be VAT registered in Belgium and obliged to share this VAT number with its supplier. Here is meant:
  • a Belgian VAT person carrying out VAT taxable transactions outside scope of art. 44 Belgian VAT Code.
    • An entity solely carrying out art. 44 Belgian VAT Code exempt transactions and VAT registered in Belgium since it exceeded the threshold of €11.200 for intra-Community acquisitions or purchases of intra-Community services, is excluded.
  • A foreign VAT person liable for Belgian VAT for its outgoing activities, not using the One Stop Shop regime or identified in Belgium for Import One Stop Shop regime.
  • A member of a VAT Group

3.The object of the e-invoice

The supply that is invoiced by a Belgian VAT person must be VAT located in Belgium and not art. 44 Belgian VAT Code exempt. This means that the Belgian supplier must use its Belgian VAT number.

Supplies under VAT reverse charge are included, eg. immovable work in Belgium between two Belgian VAT persons.

Mixed VAT persons must only issue an e-invoices when carrying out a VAT taxable supply, not for their VAT exempt activities.

When another VAT exemptions than art. 44 Belgian VAT Code is applied, an e-invoice can also be required, except for eg.:

• Intra-Community supplies of goods, since here the customer needs to share its non-Belgian EU VAT number in order to benefit from the VAT exemption.
• Export supplies of goods to non-Belgian registered customers.

Miscellaneous

No specific sanctions are provided for not complying with the e-invoicing obligation. However, when an e-invoice had to be issued and this was not done, the Belgian VAT authorities will argue that no invoice was issued. This will result in a fine (max. €5.000 per invoice) for the supplier, whereas the customer is be faced with a denial to its right to recover VAT over that invoice, increased with a penalty (5-10% of the VAT due) and interests (8% per year).

As regards self-bills and credit notes, nothing particular changes. The current rules remain the same, albeit that where an e-invoice must be issued a “self-bill – e-invoice” or “credit note – e-invoice” must be drafted.

When an e-invoice must be issued – not the case when a voluntary e-invoice is sent – the recipient must accept that e-invoice. It is an “acceptance obligation” and no longer a right to accept. The public HERMES platform can be used for receiving e-invoices should the recipient not yet have a suitable software for this.

For a VAT group that is VAT registered in Belgium:

• Each member of that VAT group must accept an e-invoice when its issuance is mandatory. Should one member of that VAT group only carry out art. 44 Belgian VAT Code transactions, it must still accept the e-invoice.
• Transactions carried out within a VAT group, so between the members of a VAT group, also require an e-invoice under the condition that that transaction requires an e-invoice when it was carried out outside that VAT group (so eg. between a member and a non-member).

Lastly, and not being a VAT measure, the Belgian government, by way of a New Year’s present, also proposes a temporary increased cost deduction of 120 pct. in income taxation. This for non-amortizable costs incurred for billing packages that enable e-invoicing, as well as relating  consulting costs. This measure will apply from the taxable period 2024 through 2027.

When will the new rules on e-invoicing enter into force?

Until this draft text, Belgium intended to introduce a B2B invoicing obligation gradually (based on the VAT identity and turnover of the issuer) as from 2024. In the new text, which is the only one that should be taken into account for now, this date has been pushed back to 1 January 2026. VAT persons will thus have more time to prepare for this, but there is also no longer provided for a gradual implementation.

From 1 January 2026 onward, a B2B e-invoice must be sent when the criteria thereto are met. This of course under the assumption that (i) the draft law is voted by the Belgian Parliament and (ii) Belgium obtains the required approval from the European Commission (for which it applied on 6 October 2023).

How can we help you?

First, you must assess whether you qualify as a subject of the e-invoicing obligation, being it as an issuer or a recipient.

Next, also the object must be considered. It will be crucial to map your transactions and determine its correct VAT treatment. It is highly advisable to implement an internal procedure whereby you create tax codes in your bookkeeping program and link the tax code to the drafting of an e-invoice, if necessary. This to avoid manual mistakes as much as possible.

Both in the assessment of your VAT position and the mapping your activities, Tiberghien can of course assist you. Do reach out to Gert Vranckx or another member of the VAT team should you require further support.