Covid-19 VAT relief measures in the pipeline
On 29 March 2021, the Belgian Tax Authorities published a list of Covid-19 tax relief measures which are in the pipeline. These measures concern extensions of existing measures as well as new measures. For VAT, the relevant measures include:
- Payment facilities: The payment facilities for tax debts will remain available upon request to businesses which have been hit by the Covid-19 pandemic.
- Reduced VAT rate for mouth masks and hydroalcoholic gels: The reduced VAT rate of 6 percent will remain 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 duty by taxpayers will temporarily be reduced to 4 percent per year. This rate is currently 9.6 percent (i.e. 0.8 percent per month). When the payable amount is recorded in an enforcement register, the 4 percent rate is doubled to 8 percent in order to avoid that the Treasury is misused as a bank account. The interest rate for late repayment of VAT and excise duties by the Tax Authorities will temporarily be reduced to 2 percent per year. The reduction is temporary and will apply to amounts payable in the period between 1 April 2021 and 30 June 2021. The measure is aimed at aligning the interest rates with those for the late payment of income tax. Additionally, the fine for late payment will be reduced from 15 percent to 10 percent.
- Reduced VAT-refund thresholds: The threshold for the refund of VAT credit will be reduced to EUR 400 for periodic returns and to EUR 50 for start-up or year-end returns.
- 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 will fully be abolished as from December 2021.
We will keep you updated about further developments and the implemented measures.
If you have any questions on the above, please contact us.