Belgium

Details

  • Service: Tax & Legal
  • Type: Business and industry issue
  • Date: 30/11/2012

New VAT rules on invoicing and chargeability of VAT 

This Thursday 29 November 2012, the House of Representatives has adopted a law implementing the European Directive n°2010/45/EU amending the rules on invoicing. This law eases the rules on electronic invoicing. Furthermore, the rules regarding the chargeability of the VAT, self-billing and receipt of payment are also modified. The new rules will be applicable as from 1 January 2013.

1. Electronic invoicing and archiving
Since a few years, the Belgian legislator allows that invoices can be transmitted electronically, under the condition the acceptance by the contracting partner and provided that the authenticity of origin and the integrity of the content of the invoice are guaranteed, trough an advanced electronic signature mechanism, an exchange of computerized data (EDI) or any other technique that offers the same level of guarantee.


Therefore, the Belgian VAT legislation was already well advanced. However, the law specifies and simplifies some aspects:

 

  • A broad definition of the electronic invoice is now integrated in the VAT Code
  • An implicit acceptance by the contracting partner is now sufficient (for example, a payment)
  • The authenticity of origin and the integrity of the content can be guaranteed through internal business controls
  • The archiving of the electronic invoices may be carried out through a server located outside Belgium. Even if Belgium did not made specific comments in this respect, an archiving of the electronic invoices on a server located outside the European territory seems to be possible now
  • The invoices can be stored on paper or electronically, whatever their original form. This will certainly mean that the current circular letter n°16/2008 regarding the scanning of paper invoices will be adapted. In all cases, it is always required that the authenticity, the integrity and the readability are guaranteed during the whole storage period, whatever the form of the invoices.


2. The invoice is no longer a cause for the chargeability of the VAT
Up to now, the VAT is in principle payable when the supply of goods or services is completed, except in case all or part of the price is received or invoiced before this moment. In practice, the VAT is due by the supplier when he issues an invoice to his client.


The rules are now modified. The VAT will now only be due in the following two cases:


i. When the supply of the goods or the services is completed
ii. When the payment is received


In other words, issuing an invoice will become irrelevant for the chargeability of the VAT. Indeed, an invoice issued before the supply or the receipt of the payment will not make the VAT payable.


An adaptation of the accounting software is therefore essential in order to dissociate the VAT reporting of the transactions from the invoice date.


Regarding the VAT treatment of advances, comments are expected from the VAT authorities. In this respect, it can be imagined that prior “invitations to pay” are sent to the client before sending a proper invoice. However, this method will, in our view, create a lot of complexity regarding the VAT accounting of advances.


3. The cash accounting becomes applicable even in case an invoice is issued
Regarding the supply of movable goods and services to individuals (i.e. B2C), the VAT becomes payable, in accordance with the VAT rules, to the extent that the price is received.


In this context, the taxpayer should not issue an invoice.


Henceforth, as the issuing of an invoice will be irrelevant to determine when the VAT will become chargeable, the cash accounting regime remains applicable even in case an invoice is issued.


4. Implicit acceptance in case of self-billing
The invoicing by the contracting partner, in the name and on behalf of the supplier, currently requires a written agreement between the parties and requires that each invoice is subject to a procedure of acceptance by the supplier.


Henceforth, an implicit acceptance of the invoice itself is sufficient. This can result from the invoicing by the contracting partner or a payment by the supplier. Please note that even if a written agreement can no longer be imposed, it is, however, always advisable.


An adaptation of the circular letter n°48/2005 regarding self-billing is therefore expected.


5. Miscellaneous
Please note also the following changes:

 

  • The period to issue an invoice is extended until the 15th working day of the month following the transaction.
  • No invoice must be issued for the exempted financial services even if the recipient of the services is established outside the European Union.
  • In case of application of the reverse charge mechanism, the sole mention “reverse charge” is now sufficient without the reference to the legal provisions being needed.
  • The Member State which has the power to establish the invoicing rules is the Member State where the transaction is deemed to take place, except when the transaction is located outside the European Union and when the client is liable to pay the VAT in another Member State. In the latter two cases, the Member State which has the power to establish the rules of invoicing is the Member State of the supplier.

 


 

 

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