Belgium tax authorities have shown massive overhauling regarding its VAT penalty regime to make it less onerous for overdue filings. This new penalty regime applies retroactively on all penalties imposed as from the 1st of January 2018. The biggest change has been the full cancellation of certain penalties when all the prerequisites are met.

The old regime imposed a fine on late VAT return filings of €100 per filing per month, plus the interest charge on any VAT not remitted was 0.8% per month. The new process introduces two new considerations: nature of the offense and missed VAT filings; plus taxpayer’s compliance history.

What does this mean for you?

If it is the taxpayer’s first offense in a four-year cycle, the fine may be waived. In the case of a second infraction, the fine will be discounted by 2% of the VAT due. Now, going forward, errors such as late filing of ECSL returns, Annual Sales Listings or mistakes when completing your VAT return will not be subject to any penalty provided the following conditions are met:

• The taxpayer was not seeking to commit VAT evasion
• The taxpayer provides a waiver request and has since filed the missed return with VAT remittance.
• There are no changes for fraud-related offenses, of where VAT is not declared properly