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Jun 16th
Home arrow News arrow Belgium introduces VAT grouping

Belgium introduces VAT grouping

In a break with the past, Belgium has introduced VAT grouping with effect from 1 April 2007.

A group of Belgian corporate VAT payers can apply to be treated as a single VAT taxpayer if they have close financial, economic and organisational ties. To qualify as a member of a VAT group, Belgian and foreign companies must be established in Belgium and be VAT payers.

VAT grouping is optional. Members of a possible group cannot be obliged to set up a VAT group or join an exiting group.  However, subsidiaries must join the VAT group if the top parent company has a direct participation of more than 50%, unless the subsidiary can prove that it has no economic, organisational or other ties with that top company.  Once a company has opted for VAT grouping, it is held by its choice at least three years. If the conditions of the VAT grouping are no longer met, a premature exit is possible or obligatory.

A VAT group simplifies procedures and saves on costs.  The companies in the VAT group need to file only one VAT return for all the members of the group. Intra-group supplies are no longer subject to Belgian VAT, which is a cash flow benefit.

VAT grouping can also offer a solution for enterprises (e.g. in the financial services industry) that cannot recover all the input VAT on the supply from a group member, for intra-group renting of immovable property and for charging back of car expenses.

On the other hand, all members of a VAT group are jointly and severally liable for the VAT debts of the members during their membership.

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