The Belgian VAT chain: Initial lessons learned

The term “VAT chain modernisation” refers to the reform of the procedures for filing periodic VAT returns, paying VAT, claiming refunds of VAT credits and monitoring compliance with these obligations.

Originally scheduled to take effect on 1 January 2024, the new VAT chain rules were postponed until 1 January 2025 and subsequently introduced in phases. Following further delays and an extended transition period, the final phase took effect on 1 May 2026 with the introduction of the VAT provision account.

Below, we share our practical experience from the first few months under the new rules and the key insights gained to date.

A refund requested through a periodic VAT return is limited to the credit reported in box 72. If no refund is requested, or if the refund conditions are not met, the credit is transferred to the VAT provision account. It can then be used to offset against future VAT debts or it can be refunded by submitting a separate request through MyMinfin. Close monitoring is therefore essential to avoid adverse cash-flow effects.

The provision account displays advance VAT payments and transferred VAT credits. However, a VAT credit disappears from the provision account once it has been allocated to a VAT debt, while a fully settled debt is likewise no longer visible in MyMinfin. This makes reconciliations more difficult for taxpayers (e.g. also for auditors in the framework of reconciliations). According to the Institute for Tax Advisors & Accountants, the Federal Public Service Finance is currently developing a functionality in MyMinfin that would allow taxpayers to access a historic overview of “settled VAT debts and paid VAT credits”.

Refunds requested through a VAT return are due by the end of the second month following the reporting period for monthly filers and by the end of the third month for quarterly filers. For refund requests submitted through the provision account, applications filed by the 15^th of the month are payable by the end of that month. Applications filed later are payable by the 15th of the following month. We are not aware of any systematic delays. If a VAT credit is nevertheless paid late, the taxpayer is in principle entitled to moratorium interest, which must be claimed.

Technical issues affecting the processing and allocation of VAT payments have resulted in late-payment interest being charged incorrectly. The tax authorities acknowledged these issues in official notices published in Dutch and French.

With the summer filing extension for the June, July and second-quarter returns now abolished, there is less room for delay. A VAT credit reported in a late return is transferred to the VAT provision account, even if a refund was requested. Late filing also prevents the taxpayer from claiming refunds through subsequent periodic returns for up to six months. Finally, the VAT credit reported in the late-filed return will not reach the provision account in time to offset against the VAT due for the next reporting period. Indeed, in case of a late-filed monthly return, the VAT credit is only recorded in the provision account two months after the actual filing date (for a late-filed quarterly return this is three months after the actual filing date). Filing on time - and closely monitoring the provision account - is therefore essential for effective cash-flow management.

If you have any questions, please contact your usual KPMG adviser.