Article 45 of the Belgian VAT Code grants the right to businesses subject to VAT to reduce the amount of VAT they owe to the VAT Administration by deducting the input VAT they have incurred on goods and services purchased, imported, or acquired from another EU country.
Input VAT can be claimed as a deduction to the extent that it relates to goods or services used in taxable transactions by the business. In cases where transactions are zero-rated for VAT purposes, input VAT may still be claimed as a deduction.
Read more about VAT returns and VAT recovery in Belgium in our comprehensive guide.
Article 45 of the Belgian VAT Code allows VAT-registered businesses to lower their VAT liabilities to the VAT Administration. They can do this by offsetting the VAT paid on purchased, imported, or acquired goods and services from other EU countries, known as input VAT. This deduction is permissible as long as the input VAT is associated with goods or services that are involved in taxable sales by the business. Additionally, even if the sales are zero-rated for VAT, businesses can still claim input VAT deductions.
Additionally, input VAT can also be reclaimed if the goods or services acquired are used in transactions outside of Belgium, but for which input VAT would have been deductible if the transactions were conducted in Belgium.
The paperwork for transactions intended for input VAT recovery must be comprehensive. For instance, invoices provided by the supplier in compliance with VAT laws should be kept.
When goods or services are utilized for both business and personal purposes, the input VAT deduction is limited to the proportion used for business operations.
Input VAT on goods or services used in the provision of tax-exempt goods or services (not to be mistaken with zero-rated supplies) is non-deductible unless the supply pertains to the exemption for financial transactions, such as granting credit, and the client is based outside the EU.
Last Updated: 20/11/2023
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