Belgium: VAT registration with a fiscal representative, new rules on guarantees

An amendment to Royal Decree no. 31 has altered the guarantee requirements for a Belgian VAT registration of a foreign taxpayer with the appointment of a fiscal representative. These changes have entered into force as of 1 October 2021.

Under the former rules, the Royal Decree granted the possibility to the VAT authorities to request a guarantee when registering via a fiscal representative. If imposed, the amount of this guarantee was calculated at 25% of the estimated VAT due for a 12-month period, without any legal minimum or maximum amount. In practice, the VAT authorities accepted a limited guarantee of EUR 7,500 for EU-established companies that registered in Belgium with a fiscal representative. Also, the VAT authorities accepted that no guarantee had to be provided when a group company was appointed as the VAT fiscal representative, however, in that case the representative bore an unlimited VAT liability.

As from 1 October 2021, the guarantee amount is initially set at 10% of the estimated VAT due for a 12-month period and must always be provided as a legal requirement. The Royal Decree now also specifies the minimum and maximum amounts that must be requested. These amounts are EUR 7,500 and EUR 1 million, respectively. Under these new rules, a guarantee should in any case be placed and further reductions of the guarantee will no longer be possible.

Alongside this, more precise rules regarding the revision of the guarantee have been implemented. The guarantee is initially determined for a period ending on 31 December of the second year following the year in which the guarantee was placed. After that period, the representative can request a revision of the placed guarantee if it would be too high and the VAT authorities would recalculate the guarantee if it would be too low. An interesting clarification is that this will be determined based on the VAT amount that has actually been paid by the foreign taxpayer during the period concerned (cf. box 71 of the VAT return). However, if the difference between the newly calculated and previously placed guarantee is lower than 10%, no revision will be required.

Under the new rules, it appears that the guarantee obligations will therefore become heavier for all foreign taxpayers that want to register for VAT with a fiscal representative in Belgium. This is of course provided that the taxpayer will perform economic activities, for which VAT will effectively be charged in Belgium.

The VAT authorities imposed the new guarantee requirements already on registered VAT taxable persons who have not yet placed a (sufficient) guarantee. Taxable persons who already have a guarantee in place, calculated at 25% of the estimated VAT amount due for a 12-month period, must examine whether they will request a reduction of the guarantee, which will be equal to 10% of the VAT amount paid (cf. box 71 of the VAT return), with a minimum of EUR 7,500 and a maximum of EUR 1 million.

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