Reclaiming your VAT credit: changes from 2025

The Law to modernize the VAT chain (Law of 12.03.2023, BS 23.03.2023) also causes the refund procedure for a quarterly principal to change. What exactly is the situation?

Procedure refund of a VAT credit until 31.12.2024?

The general principle applies here: the VAT credit is carried forward to the next tax period (Art. 8/1, §1 RD No. 4). If you want your VAT credit back, you must explicitly request it from the VAT, by checking the box “Request for refund” in your quarterly VAT return.

What VAT credit will you get back?

If the conditions are met, you will be refunded the entire outstanding VAT credit, i.e., not only the credit as shown in the submitted return, but also the credit still outstanding in the VAT current account.

What conditions must be met?

Your VAT return showing your VAT credit must have been filed on time. In addition, all previous VAT returns must also have been filed on the filing date of the VAT return showing the VAT credit and, finally, your credit as a quarterly principal must be at least €400.00 (€50.00 at the end of the year).

Change 1 from 2025: only VAT credit of period itself!

From 2025, your refund request can only relate to the VAT credit of the return in question. An accumulation of any previous balances will no longer be refunded. The accumulated surpluses in your VAT current account (which will be called commission account from then on) must be claimed back separately via the MyMinfin portal.

Change 2: A refund under different conditions.

A quarterly credit will only be refunded to you when:

(1) all returns for the last six months have been filed on time; and

(2) the refund is at least €50.00.

If these conditions are met, you will get your VAT credit back within a maximum period of three months after the return period of the declaration in which a refund was requested (Law of 12.03.2023, BS 23.03.2023).

Investment deductions: changes in 2025?

If you invest in new tangible or intangible fixed assets used for your business activities in Belgium, you can claim the investment deduction. In accordance with the law of May 12, 2024, and this for assets acquired or created from January 1, 2025, a new regulation on “investment deduction” applies. For “older assets”, the old regulations remain in force.

The following rules will continue to apply in 2025:

• the scheme remains reserved for those who enjoy “profits” or “gains” in personal income tax and those who are subject to corporate income tax or GNI/venn.
• The investment must be a newly acquired or constructed “tangible fixed asset” or qualify as a newly acquired “intangible fixed asset”. It must be used in Belgium for professional purposes. The asset must be depreciable over at least three years.
• the existing exclusions remain (e.g., for assets that are only partially used professionally or whose use is ceded to a third party, unless they themselves can apply the investment deduction).
• if the taxpayer does not have sufficient taxable basis to fully utilize the investment deduction, the excess remains transferable to subsequent taxable periods; the basic deduction is only transferable for one year;
• an SME can only claim the ordinary deduction if the fixed assets are directly related to the current or future economic activity actually being performed.

Until now, the legislature confirmed annual percentages for investment deductions (i.e., the old regulation). From now on, a fixed statutory percentage per type of investment applies as follows: The thresholds for being considered an SME have been raised as of fiscal year 2024 (Art. 1:24, §§1-6, WVV) . For the last completed fiscal year, no more than one of the following criteria may be exceeded:

• annual average headcount: 50 employees;
• Annual sales excluding VAT: €11,250,000;
• total assets: €6,000,000.

There will be three categories of investment deductions. The new flat rates do allow taxpayers to apply only to one type of deduction. Higher basic deduction for sole proprietors and SMEs: The rate of the “basic deduction” will be increased from 8% to 10%, for “digital fixed assets” you can obtain a 20% deduction.

The increased “green” thematic deduction of 30% (non-SME) or 40% (SME and natural person) applies to green investments such as:

• investments in energy efficiency and renewable energy;
• investments in carbon emission-free transportation;
• environmentally friendly investments;
• supporting digital investments.

The legislature did impose some restrictions on these thematic investment deductions:

• No application possible by companies in difficulty or companies having to repay unduly received state aid.
• Apply only to fixed assets for which no regional aid is requested
• No application if the investment causes unreasonable harm to the environment
• Attestation can only be granted if the investment appears on one of the lists.
• Existing R&D and patent deduction becomes “technology deduction”

The technology deduction provides a 13.5% deduction when the taxpayer invests in “patents” and “fixed assets aimed at R&D of environmentally friendly products and future-oriented technologies. Exceptionally, the technology deduction for R&D investments can be applied on a staggered basis according to the depreciation of the asset. The deduction percentage is then 20.5%.

Suspicious period in gifts goes from three to five years in Flanders as of 01.01.2025

In Flanders, the so-called suspect period for unregistered gifts would go from three years to five years as of Jan. 1, 2025. What exactly does that mean for you if you want to donate something? Should you really hurry or not?

To register a donation or not? It is allowed, but not required as far as a gift of chattel is concerned. A real estate gift is always subject to (progressive) gift tax, but for a moveable gift you may choose what you do. In the case you register, you pay the gift tax of 3% in the direct line and between partners and 7% between everyone else. On the other hand, when you die, the person who receives the gift no longer has to pay inheritance tax on the gifted property.

If the gift is movable property, you are not required to register. You can also work with a hand or bank donation. In that case, no gift tax is due if you do not have that hand gift registered.

If no gift tax is paid, then you should consider a “suspect period.” This means that if the donor were to die within a certain period of time after the gift, the donee will still have to pay inheritance tax on that gift.

What will change as of 01.01.2025?

Until 31.12.2024, this period in the Flemish region is three years, but from 01.01.2025 it will be five years. For a non-registered hand or bank donation from that date, you will then have to live another five years for the donee not to have to pay inheritance tax.

If no registration occurs at the time of the hand gift, then registration can be done later on a voluntary basis. You can do this in three ways:

• online, through MyMinfin, by uploading the donation documents;
• (ii) by mail, by sending the donation documents to the appropriate scanning center;
• (iii) by appointment in an office Legal Security (registration office).

For unregistered donations up to 31.12.2024, the suspect period of three years continues to apply. Only for new unregistered donations from 01.01.2025 will the longer period of five years apply. Subsequent registration (e.g. in case of serious illness of donor) remains possible, as well as entering into an insurance that pays the inheritance tax in case of death during the suspect period.

More time for your VAT return from 01.01.2025

The Law to modernize the VAT chain (Law of 12.03.2023, BS 23.03.2023) means that from 2025 there will be a number of changes for the filing of both VAT returns, IC-listing and the payment of VAT due.

From 01.01.2025, quarterly employers will be given more time to submit their VAT returns. You will also be given 5 more days for the payment of the VAT due. Concretely: as of 01.01.2025, a quarterly declaration must be submitted at the latest on the 25th of the month following the declaration period in question. Quarterly principals are given five more days for their VAT declaration.

If your quarterly declaration shows that you have to pay VAT, you will also be given that extra 5 days for payment, i.e. until the 25th. This change goes into effect on 01.01.2025 which means that the new rule already applies to your VAT return of last quarter 2024.

You can also check this on the FPS Finance’s VAT calendar: ( https://financien.belgium.be/nl/ondernemingen/btw/btw-kalender ).

Note! For VAT monthly filers, the 20th remains the deadline and that both for the declaration and payment of VAT.