This chapter contains these topics:
Belgium is part of the European Union (EU), which observes the Single European Act of 1987. The Single European Act is an agreement that opens the markets to an area without internal frontiers (boundaries), in which free movement of goods, persons, services, and capital is assured in accordance with the provisions of the Treaty of Rome.
The JD Edwards World solutions for tax requirements in Belgium includes printing value-added tax (VAT) reports.
Caution:
For tax processing and reporting in Belgium, you must set up your system to meet specific Belgium requirements. For more information, review the Setup Requirements section of this guide.Value-added tax, or VAT, is a noncumulative tax that tax authorities in Belgium impose at each stage of the production and distribution cycle. VAT is a tax on consumer expenditure.
If you work with VAT, you should understand the following terminology and principles:
| Term | Description |
|---|---|
| Output VAT | Suppliers of goods and services must add VAT to their net prices. They must record output VAT for goods on the date that they issue invoices and for services on the date that they receive payment. |
| Input VAT | Input VAT is paid by the purchaser of goods and services to the supplier. If the purchaser is subject to VAT of sales (output VAT), they can offset the input VAT they owe against any output VAT that they owe.
The purchaser can recover input VAT by offsetting it against output VAT. When input VAT exceeds output VAT, the purchaser can obtain a cash refund. |
| Nonrecoverable input VAT | Input VAT cannot be recovered on:
Goods and services that are not necessary for running the business. Expenses that are related to business entertainment. Transport of persons. Oil-based fuels and lubricants that are transformed and then resold. Goods that are provided free of charge or at a substantially reduced price. Purchase of cars. Services related to goods that are normally excluded from the right of recovery. |
| VAT returns | Companies with a Belgian VAT number must submit periodic returns detailing all taxable supplies (sales) and inputs (costs). Generally, returns are submitted quarterly in Belgium – although monthly returns are sometimes required. VAT returns in Belgium are due by the 20th of the month following the reporting period. |
| VAT exemptions | Certain types of supplies are exempt from VAT. Businesses can obtain a list of these items from the local tax office. |