Covid-19 VAT relief measures adopted
The previously announced VAT measures to ease the adverse financial effects of the COVID-19 pandemic, are adopted in the “Law on temporary support measures due to the COVID-19 pandemic”, which was published in the Belgian Official Gazette of 13 April 2021 (see here in NL / FR ). Additional measures were included in two Royal Decrees, as indicated below. We reported earlier on the announced plans in our news item here.
The details of the adopted VAT measures can be summarized as follows:
- Reduced VAT rate for mouth masks and hydroalcoholic gels: The reduced VAT rate of 6 percent remains applicable to the supply, intra-Community acquisition and import of mouth masks and hydroalcoholic gels until 30 June 2021.
- Reduced interest on late payments:
- The interest rate for negligent late payment of VAT and excise duties by taxpayers is temporarily reduced to 4 percent per year for the months April, May and June (2021). This rate is normally 9.6 percent per year (i.e. 0.8 percent per month).
- When the payable amount is recorded in an enforcement register or is based on a judicial decision, the applicable interest rate for the months April, May and June (2021) is 8 percent per year, calculated from the date of enforceability in the register or the decision, respectively.
- The interest rate for late repayment of VAT by the Tax Authorities is temporarily reduced to 2 percent per year for the months April, May and June (2021).
- Reduced fine for late payment: The rate of proportional fine for the late payment of VAT payable based on a VAT return, is temporarily reduced from 15 percent to 10 percent of the outstanding VAT debt for the period between 1 April 2021 and 30 June 2021. For the Royal Decree specifying this measure, see here in NL / FR .
- Reduced VAT-refund thresholds: In order to help enhancing the liquidity of businesses, the thresholds for the refund of VAT credits are reduced as follows:
- in the case of a refund requested in a periodic VAT return which concerns the last return period of the calendar year, the threshold is reduced from EUR 245 to EUR 50;
- in the case of a refund requested in a periodic VAT return concerning any of the first three calendar quarters by a VAT taxpayer filing quarterly returns, the threshold is reduced from EUR 615 to EUR 400;
- in the case of a refund requested in the last periodic monthly VAT return of a calendar quarter by a VAT taxpayer filing monthly returns, the threshold is reduced from EUR 1485 to EUR 400;
- in the case of a refund requested in a periodic monthly VAT return by a VAT taxpayer filing monthly returns and having a monthly refund licence, the threshold is reduced from EUR 245 to EUR 50;
- in the case a refund is requested in a periodic monthly return which falls within the first 24 month period beginning from the start date of the economic activity by a VAT taxpayer filing monthly returns (i.e. starters), the threshold is reduced from EUR 245 to EUR 50;
The reduced thresholds are effective as from 1 April 2021. As a result, VAT taxpayers will be able to request VAT credits based on the new thresholds in their periodic VAT return concerning the first quarter of 2021 or the last month of that first quarter, as the case may be. For the Royal Decree specifying this measure, see here in NL / FR .
- Abolition of “December advance deposit”: VAT-taxable persons that file quarterly or monthly VAT returns were required to pay a “December advance deposit” (decembervoorschot / acompte en décembre ). This requirement was temporarily suspended in 2020 and is now fully abolished, practically applicable as from December 2021. As a result, box 91 of the VAT return has become redundant and the VAT return form will be modified accordingly. For the Royal Decree specifying this measure, see here in NL / FR .
If you have any questions about the above measures, please do not hesitate to reach out to us.