The Belgian Parliament adopted a draft law concerning diverse tax and financial provisions on 10 November 2022 (hereinafter: the Law). This Law also contains amendments to the VAT statute of limitations, retention period and applicable interest rates, claiming a better alignment with the income tax rules as well as an enhanced ability to fight VAT fraud more effectively.
VAT statute of limitations
The VAT statute of limitations determines the period during which the VAT authorities can claim the VAT. The new rules of the Law implement changes to this statute of limitations and will apply for VAT that becomes chargeable as from 1 January 2023.
Under the new rules of the Law, the statute of limitations in the case of late or non-filing of a periodic VAT return is extended from three to four calendar years following the one in which the VAT became chargeable. For example, if the VAT became chargeable on 18 January 2023, the statute of limitations will last until 31 December 2027 if the VAT return for January was not (timely) submitted (i.e., by 20 February 2023).
Furthermore, when an offence with fraudulent intent or with the intent to cause harm is committed, the VAT statute of limitations is extended to the tenth calendar year following the one in which the VAT became chargeable.
For all other cases, the current rules of the three and seven years of statutes of limitations remain applicable. The following table provides a comprehensive overview of the current and new rules:
VAT statute of limitations (calendar years) |
||
VAT chargeable |
until 31 December 2022 |
as from 1 January 2023 |
General |
3 years |
3 years |
No or late periodic VAT return |
3 years |
4 years |
Specific cases of cross-border info / court order / other evidence |
7 years |
7 years |
Fraud |
7 years |
10 years |
Retention period and interest rates
The Law extends the retention period for VAT invoices, books and other documentation from seven to ten years in order to ensure alignment with the extended statute of limitations. Additionally, the Law also amends the interest rates applicable to late payment of VAT and refundable VAT amounts. For 2023, the interest rates will be set at 8%/year (payable VAT amounts) and 6%/year (refundable VAT amounts). These rates can be adapted on a yearly basis, but the interest for refundable VAT amounts will always be 2 percentage points lower than the interest for payable VAT amounts.
How can KPMG help you?
The new rules impact VAT compliance. Most importantly, the late filing of a periodic VAT return will automatically trigger a longer period of statute of limitations. Accordingly, compliance with timely filing will be key to keep the general statute of limitations restricted to three years. It is therefore advisable that VAT taxable persons:
- take all necessary steps to ensure that the periodic VAT returns are correctly filed in time. This may imply a revision of the current compliance processes if experience shows that occasional late filing of these returns occurs; and
- monitor timely filing and keep track of any late filings to have clarity about the applicable statute of limitations in case of a future VAT audit.
If you have any further questions about the implications of the above new rules for your VAT administration and compliance, do not hesitate to contact us. We are happy to assist you.
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