Reduced VAT rates

On 14 December 2009, the extension until 31 December 2010 of the reduced VAT rates in the building industry and the reduced VAT rate for restaurant services has been published in the Belgian Official Gazette.

More specific, the law provides for the reduced rate of 6% for the demolition and reconstruction of dwellings located in Belgium. From 1 January 2011, the reduced rate will again be limited to demolition and constructions work in certain cities.

The application of the reduced rate on an instalment of 50.000 euro of the price for the construction or supply of a dwelling and the rules regarding the social housing has also been extended until 31 December 2010.

The application of the reduced rate in 2010 will only be possible when the request for the construction authorization has been submitted before 1 April 2010.

Finally, the reduced rate for restaurant and catering services of 12% will enter into force on 1 January 2010. Alcoholic and non-alcoholic beverages are excluded from the reduced rate. As announced, this measure will be evaluated in 2010 and the Belgian government will envisage reducing the rate to 6% from 1 January 2011.

For further information, please feel free to contact danny.stas@tiberghien.com

Reference: Royal Decree 9 December 2009, OG 14 December 2009.