Belgium – Parliament Adopts VAT Bill on various VAT changes

In February 2026, the Belgian Federal Parliament approved a comprehensive VAT reform bill (Bill No. 56/1205). This landmark legislation introduces significant shifts in compliance enforcement, asset monitoring, and administrative procedures designed to modernise the Belgian VAT system.

Modernisation of the VAT Chain – Substitute Returns:
The reform introduced a strengthened enforcement mechanism for non-filing, bringing back elements of the previously postponed “VAT Chain” modernisation.

Substitute Return Mechanism:
If a taxpayer fails to submit a periodic VAT return, the authorities can now issue a substitute VAT return.

Automated Assessment:
This return assumes a VAT liability equal to the highest amount declared in the preceding 12 months, with a mandatory minimum of €2,100. Taxpayers have one month to submit the outstanding return once notified, otherwise the substitute assessment becomes final.

Stricter VAT Refund Procedures:
The bill introduces a new “three-month rule” for processing VAT refunds, contingent on strict compliance.

Eligibility Conditions:
To qualify for a refund within three months of the assessment period, a taxpayer must have filed all VAT returns for the preceding six months on time.

Offsetting:
Refunds will be automatically offset against any existing or anticipated tax debts before being paid out.

Clarification on VAT Identification Numbers:
The legislation provides much needed administrative simplification regarding when a VAT ID must be reported for supplies to non-Belgian customers.

VAT identification number does not need to be reported for supplies of goods and services rendered in Belgium but performed exclusively for an establishment located outside Belgium. The number only needs to be reported if the taxable persons are located in Belgium.

Extended Adjustment Periods for Assets:
To align with recent European jurisprudence, the bill significantly lengthens the VAT adjustment (revision) periods to 15 years for specific asset categories, effective from 1st January 2026.

VAT Deduction under Small Companies Regime
VAT paid for goods and services under the small companies regime is not deductible. If however, the regime only applies for part of the year, the non-refundable VAT is calculated pro rata.

Additional 2026 Measures
Beyond the structural reform bill, businesses should note other significant changes taking effect in 2026:

Mandatory B2B E-Invoicing:
Starting January 1, 2026, all Belgian VAT-registered businesses must exchange structured electronic invoices via the Peppol network.

Targeted Rate Changes:
Effective 1st March 2026, VAT on hotels, campsites, and takeaway meals will rise from 6% to 12%, while VAT on non-alcoholic drinks in restaurants will drop from 21% to 12%.