A recently adopted amendment to Royal Decree nr. 31 will alter the guarantee requirements for a Belgian VAT registration of a foreign taxpayer with the appointment of a fiscal representative. These changes will enter into force as from 1 October 2021.
Currently, the Royal Decree grants the possibility to the VAT Administration to request a guarantee when registering via a fiscal representative. If imposed, the amount of this guarantee is calculated as 25% of the estimated VAT due for a 12-month period, without any minimum or maximum amount. Under these rules, the VAT Administration accepted that no guarantee had to be provided when a group company was appointed as the VAT fiscal representative but in that case the representative did however bear an unlimited VAT liability. Lastly, the VAT Administration had the ability to revise and adjust the amount of the initially placed guarantee. In practice, the VAT authorities accepted a limited guarantee of 7.500,00 EUR for EU established companies that registered in Belgium with a fiscal representative.
From 1 October 2021, the guarantee amount will be set at 10% of the estimated VAT due for a 12-month period and must by law always be requested. The Royal Decree now also specifies the minimum and maximum amounts that must be requested. These amounts are EUR 7.500 and EUR 1 million respectively. Although the VAT administration has not yet issued an update to its previous point of view, it seems that under these new rules a guarantee should always be granted and a reduction of the guarantee will no longer be possible. Consequently, a minimum guarantee of EUR 7.500 will always be required when registering with the appointment of a fiscal representative.
Next to this, more precise rules regarding the revision of the guarantee have been implemented. The guarantee will initially be determined for a period ending on 31 December of the second year following the year in which the guarantee was placed. After that period, the representative can request a revision of the placed guarantee if it would be too high and the VAT authorities will recalculate the guarantee if it would be too low. When the difference between the newly calculated and previously placed guarantee is lower than 10%, no revision will however be required.
These new rules will in any case apply for new VAT registrations with a fiscal representative as from 1 October 2021. It appears that the guarantee obligations will therefore become heavier for all foreign taxpayers that want to register for VAT with a fiscal representative in Belgium.
At the moment it is still unclear whether the VAT administration will impose the new guarantee requirements on already registered VAT taxable persons who have not yet placed a (sufficient) guarantee. Taxable persons who already have a guarantee in place, calculated at 25% of the estimated VAT amount due for a 12-month period, must examine whether they will request a reduction of the guarantee, which will be equal to 10% of the VAT amount due, with a minimum of EUR 7.500 and a maximum of EUR 1 million.
If you would like any further information on these new rules, please do not hesitate to contact us.
Stijn Vastmans - Partner (stijn.vastmans@tiberghien.com)
Gert Vranckx - Senior Associate (gert.vranckx@tiberghien.com)
Lode Van Dessel - Associate (lode.vandessel@tiberghien.com)
