2019

Posted on 5 April 2019 by odb — No Comments ↓

The regulations concerning vouchers has become a national law since 1/1/2019. This only concerns vouchers that give notification of conditions and vouchers that can be exchanged for a delivery of services or good, thus it does not include discount coupons.

For so-called single vouchers, or vouchers where the VAT is already known, the VAT is payable from the moment the voucher is made up. For instance a voucher that you can redeem for a beverage basket. Hereby, you already known the VAT (21%) beforehand. In case the voucher is not redeemed within the agreed period, the VAT cannot be recovered.

In case of multiple use, or vouchers where the VAT amount is not known beforehand, the VAT is payable when the voucher is redeemed. For instance, a voucher for a restaurant visit. When you make up the voucher you don’t know whether the person will use it for beverages (21%) or for meals (12%). In case of non-use of the multiple vouchers, there will be no VAT since the VAT is only calculated when redeemed.

VAT revolution for the real estate sector

Posted on 17 August 2017 by odb — No Comments ↓

Letting real estate in Belgium is in principle a VAT-exempted activity (Art. 44, 3, 2 W.BTW).

The down side of this exemption implies that the VAT due by property developers and rental agencies of commercial properties to contractors for new constructions and renovations is not recoverable.

The non-recoverable VAT is therefore an expense that is often recharged in the rental price.

The summer agreement refers to a change to the current exemption for letting real estate. Concrete texts are not yet available, but the amendment would provide in an optional VAT system.

For lease agreements coming into effect from 1 January 2018, the charge of 21% VAT on the rental price would be possible.

Those who choose for this option will be able to eventually recover the full VAT paid to the contractors.

The application of VAT is an option and no obligation.

Earlier concluded lease contracts are explicitly excluded.

The rented property must also be used for professional purposes (B2B environment). Other tenants like public institutions (if not primarily used for VAT activities), individuals, etc. would not be eligible.

For the tenant is the VAT neutral as he can deduct the VAT charged on the rent. The minister even expects rental prices to fall because landlords will no longer need to recharge the non-deductible VAT as there is none.

This amendment would also imply an administrative simplification as tax structures, such as usufruct or immovable leasing that were built in the past to enable landlords to however recover VAT, will no longer be required.

The reform should also put an end to the competitive handicap vis-à-vis surrounding countries. In the Netherlands and in the UK, property developers have long been able to recover VAT.

Comments:

A VAT unit already provides for deductibility of VAT to the extent that the building is used for the exercise of VAT activities and, in most cases, offers other benefits, such as avoiding pre-financing of VAT on mutual transactions.

The start date of January 1, 2018 immediately raises questions about the fiscal fate in renewal of contracts, the possibility of a revision of input VAT for older buildings for investment within the review period (5 or 15 years depending on the nature of the works) , as well as the impact on registration fees due for such leases.

We will of course keep you informed of further developments in this regard.

VAT advance payments abolished. Is the 20th of the month still important to you?

Posted on 3 February 2017 by odb — No Comments ↓

Individuals and companies who opted for the regime of quarterly VAT declarations, need to consider 5 instead of 12 payments a year going forward.

As from April 1, 2017 VAT taxpayers with a quarterly tax return will no longer pay monthly VAT advances. For the sake of clarity, for month taxpayers nothing changes.

The purpose of the abolition of VAT advance payments is to simplify the VAT procedure.

This simplification comes down to:

Currently quarter taxpayers must pay VAT advances for the first and second month of the quarter equal to 1/3 of the outcome due of the previous quarter. The payment related to the third month of the quarter is done based on the actual VAT return.

In other words, the arrangement for quarter taxpayers involved monthly payments whereby a settlement of the actual VAT balance took place on quarterly basis.

The simplification implies that the payment of VAT will coincide with the tax return obligation. If you are a quarter taxpayer, you will be paying the VAT on a quarterly basis as well.

This simplification does not mean that:

First, you will not pay less taxes. The VAT debt remains the same, you only pay it on quarterly basis instead of through monthly payments.

For some VAT taxpayers will the above result in a substantial payment each quarter. If applicable, put money aside throughout the quarter to fund the payment.

Second, not all advance payments are abolished. Both month as quarter taxpayers are now required to pay December’s advance. The advance payment arrangement for the fourth quarter will therefore apply to all VAT taxpayers.

Were you quarter taxpayer before 1.1.2017, then you still owe the advances for January and February. The simplification is namely foreseen to enter into force as of April 1, 2017.

The 2017’s deadlines for VAT purposes are as follows:

Still questions, email us at info@odb.solutions