On 21 June 2023, the Belgian tax authorities published Circular Letter 2023/C/63 (Dutch | French) concerning a number of amendments to certain VAT provisions by various royal decrees. The circular letter includes comments on changes to the reverse charge system for building works for taxable persons obliged to submit a periodic VAT return, the special flat rate scheme for small café owners, the right to deduct VAT according to the actual use of all or part of goods and services, the removal of food from a business with a view to its provision for charitable purposes, and various technical amendments.
This alert addresses the clarifications provided in the circular letter regarding the amended notification procedure applicable to the exercise of the right to deduct VAT according to the principle of “actual use.”
As from 1 January 2023, the procedure for the application of the actual use method has changed. The circular letter provides clarification on the need to replace the “prior approval” procedure with a digital “prior notification” procedure.
Mixed VAT payers who already applied the actual use method on or before 31 December 2022 must also submit the digital e-notification (no later than 30 June 2023). This is partly because some decisions that date from a period before the digitalisation of FPS Finance are no longer available.
The following clarifications are provided:
The circular letter contains several clarifications regarding the notification requirements for the application of the actual use method, and also provides practical examples. Although the circular letter does not discuss the exact calculation method of the data to be communicated in 2024, affected taxpayers may wish to start preparations as soon as possible.
Danny is head of the tax advisory practice. He is a tax lawyer specialised in VAT, in particular with respect to real estate and financial transactions, as well as eco taxes and contributions. As partner in the firm, Danny focuses on VAT consulting for Belgian clients in the private and public sectors and the broad corporate market at national and international level. In the real estate industry, Danny focuses on VAT consulting for clients in the private (e.g. real estate developers, REITs, hospitals, senior housing, etc.) and public sectors and the broad corporate market at national and international level. Besides the specific VAT topics (e.g. reduced VAT rates, VAT exemptions), he has also good knowledge of alternative financing of real estate and transfer duties. Danny is a recommended lawyer in the Chambers Europe and Legal 500 directories.