VAT Refund in Belgium: Eligibility, Process & How to Claim

VAT refund in Belgium allows businesses to recover excess VAT paid on purchases. The process involves filing periodic VAT returns, requesting a refund explicitly, and meeting minimum thresholds. Refunds are paid directly to the financial account registered with VAT authorities.

This blog explains the VAT refund process in Belgium, eligibility criteria, and methods.

VAT in Belgium

VAT in Belgium is an indirect consumption tax applied at each stage of the supply chain. It is charged on goods and services, with businesses acting as intermediaries by collecting VAT from consumers. The VAT rate varies, with a standard rate of 21%, and reduced rates for specific goods and services. 

Businesses must register for VAT, generate VAT-compliant invoices, collect the tax from customers, and remit it to the government via electronic periodic returns. The burden tax is ultimately borne by consumers, while businesses ensure its collection and timely remittance through the Intervat platform.

VAT Recovery: Set off vs Refund

VAT recovery involves two methods: set-off and refund. Set-off occurs when paid VAT (input tax) is deducted from the VAT charged on sales (output tax), reducing the net VAT liability. Refund occurs when the tax authorities return the excess VAT paid on purchases (input tax) to the taxpayer's bank account after filing a claim.

Things to Know About the VAT Refund Process in Belgium 

Each taxpayer has a VAT account on MyMinfin that tracks VAT balances. Here’s what you should know about the VAT refund process:

• Credit Carryforward: If a surplus arises, the credit is carried over to the next period by default.
• Refund Request: VAT refunds are not automatic; taxpayers must request them by ticking the "Request a refund" box.
• Refund Deadline: Refund requests must be submitted before 31 December of the third year following the date of submission of the return showing the credit.
• Third-Party Authorisation: Taxpayers can authorise a third party to handle VAT refunds  via the Mandates application.
• Filing Frequency: Refunds are available based on the VAT filing frequency (monthly or quarterly).
• Bank Account Details: Refunds are deposited into the taxpayer’s bank account provided during VAT registration.
• For some expenses, VAT refunds are limited to business usage, such as up to 50% for passenger vehicles.
• Shared equipment, like ICT and phones, has a proportional VAT deduction based on business use. 

Eligibility of VAT Refunds in Belgium

In general, you have the right to deduct the VAT on your business purchases from the VAT you collect from customers if you are a business owner in Belgium. If your business collects less VAT from consumers than it spends on purchases, the difference will be reimbursed. However, some professional activities are excluded from VAT under Article 44 of the Belgian VAT Code, including:

• Non-aesthetic medical services provided by doctors, dentists, or physiotherapists
• Services by midwives, healthcare assistants, and nurses
• Activities by regulated paramedical professionals, such as dieticians, speech therapists, and chiropodists
• Specific socio-cultural activities
• Hospital care and medical assistance
• Transport for the sick or injured using specialized vehicles
• Elderly, youth welfare, and disabled care
• Health insurance activities
• Educational services
• Lending books, newspapers, and other cultural materials (libraries)
• Organizing exhibitions, concerts, and performances (theater, ballet, film)
• Sale, rental, or leasing of immovable property
• Insurance and financial activities, including credit provision

VAT Filing Frequency

A minimum VAT credit is required for a refund in Belgium. The refund eligibility is determined by the VAT credit for each specific quarter.

Quarterly VAT Returns and Monthly VAT Returns (Standard Scheme)

Monthly VAT Returns (Special Scheme)

Refunds are granted if your VAT credit reaches a minimum of €50, provided you file monthly returns and your company qualifies for the monthly refund scheme by meeting one of these criteria:

• conducts largely exempt transactions
• operates in the real estate sector and applies the reduced vat rate
• fulfills public service obligations
• supplies electricity, natural gas, or heat under the reduced vat rate
• is a newly established taxable business)

Types of Purchases Eligible for VAT Refund 

When shopping in Belgium as a non-EU tourist, certain purchases qualify for a VAT tax refund Belgium. Here’s a breakdown based on the guidelines:

• The total value of goods must exceed €125 per invoice or Tax-Free Form.
• Multiple invoices amounting to a minimum of €125.01 from the same retailer on the same day can be combined.
• Purchases must be for personal use, not business purposes.
• The items must leave the EU within three months after the end of the purchase month.
• Goods must be carried in personal luggage during export.

Non-VAT Refundable Goods and Services

• Tobacco and alcoholic drinks, unless for resale or part of a service, are ineligible for VAT refunds.
• On-site accommodation, meals, and drinks, except for staff or businesses offering paid services, are non-refundable.
• Reception costs and goods/services provided to travel agents under the margin scheme are excluded.
• Second-hand vehicle and goods transactions under the margin scheme are not eligible.

Step-by-Step Process of the VAT Refund 

During filing VAT, only when the taxpayer specifically requests it can a tax credit be refunded. Here’s how:

Step 1: Access and Identify the VAT Return

In the “Dashboard” tab of the Intervat platform, enter your VAT number and select “VAT return” to start the process for the relevant period. 

Step 2: Provide General Information

Under the “Taxpayer” section, add your email address. Specify the “Period of declaration” as monthly or quarterly, based on your filing frequency. If you are filing as a representative or lack a VAT number, fill in the “Representative” section and use your national number if needed. 

Step 3: Enter Refund Details in the VAT Return

In the “Data of the return” section, tick the relevant grids for your refund application. If you are a mixed or partial taxable person, fill out the “Prorata basis” section with a value from 1 to 99 as the refund percentage. Note that leaving it blank defaults to 100%. 

To explicitly apply for a refund, tick the box for “Ask for restitution.” Or, tick “Ask payment form” if you prefer a paper payment form. Attach supporting documents in the “Comment” section. Add comments if required.

Step 4: Validate Refund Application Data, Sign, and Submit

Check the “Validation of the data entered” section for error messages, as unresolved issues may result in rejection of your return. In the “Summary of data entered & agreement” section, finalize the process by clicking “Drawing and submission.” 

VAT Refund Payment Methods 

Belgium processes VAT refunds directly to the financial account you provide during your VAT registration. When you start your business, you must include your financial account number on the VAT identification application (Form 604A). This form is submitted via the e604 application, accessible through MyMinfin. If you did not provide an account number when starting your business, update your account details.

Conclusion

VAT refunds require explicit requests on periodic returns. Refunds are issued four times a year for quarterly returns, with minimum credit thresholds. Monthly returns may receive VAT refunds if specific conditions are met, such as being a "starter" or operating in specific sectors.

Refunds must be requested before 31 December of the third year following the credit return. Non-EU tourists can claim VAT refunds for purchases over €125, provided they leave the EU within three months. Refund payments are directly processed to the financial account provided during VAT registration or updated via MyMinfin.