Belgium is taking a step forward in modernizing its VAT system as part of its Federal Coalition Agreement, finalized on January 31, 2025. These reforms aim to enhance tax compliance, streamline reporting, and reduce fraud through the implementation of mandatory e-Invoicing and near real-time e-Reporting.
Belgium joins a growing list of countries implementing continuous transaction controls (CTC), aligning with the Peppol 5-Corner Model and broader European initiatives under VAT in the Digital Age (ViDA).
Key VAT Reforms in Belgium
Belgium’s updated tax policies introduce two major changes in VAT compliance for businesses:
- Mandatory e-Invoicing (January 2026):
- Businesses must adopt structured e-Invoicing for B2B transactions starting January 1, 2026.
- This will replace traditional invoice formats with standardized digital invoices, improving accuracy and efficiency.
- Near Real-Time E-Reporting (January 2028):
- Starting in 2028, businesses will be required to electronically report transaction data to tax authorities in near real-time.
- This measure is designed to combat VAT fraud by ensuring that tax authorities receive up-to-date transactional data, reducing opportunities for tax evasion.
- VAT-registered businesses, including non-residents with a VAT Fixed Establishment (“FE”) will be obliged to comply with this mandate.
- Non-resident businesses without a Belgian FE, will only be able to receive Peppol (or other EN16931 standard) structured e-Invoices from their Belgian counterparts.
- Elimination of the Annual Sales Listing Requirement (January 2028):
- Belgium is looking to implement a Peppol 5-corner model. In addition to e-Invoicing, this will include the near-live e- reporting of transaction data (based on e-Invoices), which will replace the annual report on the list of customers.
Integration of Cash Registers, Payment, and Invoicing Systems
To further enhance tax transparency and efficiency, Belgium plans to integrate various financial systems, including:
- Cash registers
- Payment systems
- Invoicing software
These systems will automatically transmit VAT-related data to the tax administration, allowing authorities to conduct data mining and VAT audit inspections more effectively.
Belgium Joins the Peppol 5-Corner Model for e-Invoicing
Belgium is aligning its e-Invoicing framework with the Peppol 5-Corner Model, a standardized global e-Invoicing network. Peppol is gaining widespread adoption in Europe and beyond, with countries such as Singapore, UAE, Oman, and France leveraging the model for improved e-Invoicing interoperability.
The adoption of Peppol Continuous Transaction Control (CTC) will allow Belgian businesses to seamlessly exchange invoices within the network, ensuring compliance with VAT regulations while reducing manual errors and administrative inefficiencies.
Preparing for the Transition
For businesses operating in Belgium, these VAT reforms mean significant changes in invoice processing and tax reporting. Companies should begin preparing by:
- Upgrading to e-Invoicing systems that comply with Peppol standards.
- Integrating financial systems with tax authorities to enable automated reporting.
- Staying informed on implementation timelines and compliance requirements.
By proactively adapting to these changes, businesses can enhance compliance, reduce administrative workload, and improve operational efficiency in the evolving digital tax landscape.
