VAT exemption for medical and hospital care
Following the amendment to the VAT exemption for medical and hospital care, the Belgian Tax Authorities announced VAT tolerances and published a new VAT Circular. The VAT exemption for medical and hospital care was amended effective from 1 January 2022 by Law of 11 July 2021. The amendment aims to align the scope of the exemption with EU legislation and Belgian case law, and explicitly excludes non-therapeutic services from the scope. For more details, see our previous news item: Amendments to the VAT exemption for medical and hospital care (mytaxcompass.be).
The amendment has substantial impact on the VAT position of many (para)medical and hospital care providers and triggered a lot of questions from the affected care sectors. In response, the Belgian Tax Authorities announced tolerances on their website on 9 December 2021 (see: FR / NL). These tolerances provide certain transitional measures with regard to the applicable VAT regime, VAT identification, first periodic VAT returns and the revision of deducted VAT.
For further guidance, the Belgian Tax Authorities published Circular 2021/C/114 concerning the VAT exemption for medical care by qualifying persons and for hospital care on 20 December 2021 (see NL / FR). This VAT Circular contains commentary to the amended provisions of the VAT exemption for medical and hospital care. The provided guidance supplements the existing commentaries, which remain applicable unless overwritten by this VAT Circular.
How can KPMG help you?
The amendment to the VAT exemption for medical and hospital care impacts many service providers of (para)medical and hospital care, depending on the current VAT treatment of their services. For example, the majority of paramedical services are currently subject to VAT but will be VAT exempt from next year. In contrast, hospital care with non-therapeutic aim is currently VAT exempt, but will be subject to VAT. This means that these service providers need to revise their VAT position and ensure a smooth transition in their VAT administration.
If your services are potentially affected by the amendment, we recommend you to review your current VAT position in light of these amendments. If you have any questions on how the new rules specifically impact your services and how you can ensure a smooth transition in your VAT administration, do not hesitate to contact us.