This article by Antoine Druetz and Sofie Van Doninck outlines the key changes to VAT regulations that will impact non-profit organisations (NPOs) in Belgium starting January 2025. It provides a comprehensive overview of new submission deadlines, the introduction of replacement VAT returns, and the introduction of fines for non-compliance.
As we settle into 2025, significant changes in the VAT regulations are already shaping the landscape for various sectors, including the non-profit sector. Indeed, the Belgian VAT Authorities have implemented practical changes that emphasize compliance. This article will explore the key VAT novelties that non-profit organisations (hereafter: “NPO”) need to be aware of as they navigate the fiscal year ahead.
I. VAT Changes Effective January 2025
A. New Submission and Payment Deadlines
The deadline for the submission of the quarterly VAT returns and IC sales listings, including the so-called ‘special’ VAT returns, is extended from the 20th day to the 25th day of the month following the reporting period to which the return and listing relates. Also the VAT due resulting from these submitted quarterly VAT returns should be paid at the latest on the 25th day of the month following the reporting period. The submission and payment deadline for VAT-taxable persons who file monthly VAT returns and IC sales listings remains unchanged, i.e., still to be submitted and paid on the 20th day of the month following the reporting period.
B. Changes to Corrective VAT Returns
As from January 1st, 2025, it is no longer possible to file a corrective periodical VAT return once the legal submission deadline has expired. Accordingly, in case you discover a material error (i.e., any error or mistake which does not result in drafting or issuing a corrective document) after this period, you should include the correction thereof in your next upcoming VAT return.
C. Response Time to VAT Authorities
From now on, when the Belgian VAT Authorities send a request for information, the taxable person must respond within one month as from the 3rd working day following the moment that the request for information was send. This deadline can be extended but only for well-founded reasons. This period of one month is reduced to 10 days when the rights of the Belgian State are in danger, or the request is part of an audit of the VAT refund resulting from the periodical VAT return.
D. Introduction of Replacement VAT Returns
When the taxable person does not file the VAT return within 3 months following the reporting period to which it relates, the Belgian VAT Authorities will make a proposal for a replacement VAT return. This proposal is sent via registered mail. The Belgian VAT Authorities will in this respect themselves calculate a VAT amount due based on the highest VAT amount due resulting from one of the VAT returns of the previous 12 months, with a minimum of EUR 2,100.
The taxable person then still has one month to file the missing VAT return. Once this missing VAT return is filed, the procedure regarding the proposed replacement VAT return is ended. If no VAT return is filed within this one-month period, the replacement VAT return will be final. If the taxable person does not agree with this return, only an administrative appeal is possible (or a petition before court).
E. New Fines for Non-Compliance
Fine for late filing: in case of late filing of a VAT return, the Belgian VAT Authorities can impose a fine of EUR 100 per month of delay, with a maximum of EUR 500.
Fine for non-filing: in case no VAT return is filed, the Belgian VAT Authorities can impose a fine between EUR 500 and EUR 5,000 depending on the frequency of the infringement.
Fine for non- or overdue payment of VAT due: the Belgian VAT Authorities can impose a fine between 5% and 15% of the VAT due for not or late paying of the VAT depending on the timely (or not) submission of the VAT return or if the taxable person is in the procedure that a replacement VAT return became final.
II. Implications for NPOs
As the VAT landscape changes with new regulations effective January 2025, NPOs must prioritize compliance to avoid penalties. New submission deadlines, restrictions on filing corrective returns, and fines for late or non-filing require proactive VAT management. NPOs should update their accounting practices to ensure timely VAT return submissions.
Additionally, NPOs involved in cross-border activities should be especially cautious, as new response times to VAT authorities and replacement VAT returns may affect their operations. Staying informed about these changes is essential for effective VAT compliance.
III. Conclusion and call to action
The 2025 VAT changes are significant for NPOs, highlighting the need for compliance and timely reporting. By adapting to these regulations, NPOs can enhance their success in the evolving VAT landscape.
NPOs should consult VAT professionals for tailored insights on how these changes may impact their operations. Staying informed and compliant is crucial for navigating the challenges and opportunities ahead.
If you have any questions or concerns related to VAT or non-profit law, Antoine DRUETZ, Partner will gladly assist your organisation.
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