The digital transformation of tax compliance is sweeping across Europe, and Belgium stands at the forefront of this change with its comprehensive e-invoicing mandate. For businesses operating within or with a nexus in Belgium, understanding and proactively addressing these new requirements is no longer optional; it’s a strategic imperative. This article delves into the intricacies of Belgium’s e-invoicing framework, its implications for various business functions, and the urgent steps needed to ensure seamless compliance and unlock operational efficiencies.
The Dawn of Digital Documentation: What Belgium’s e-Invoicing Means
At its core, e-invoicing in Belgium involves the electronic creation, transmission, and archiving of invoices using recognised structured formats. The primary goal is multifaceted: to enhance VAT collection, streamline both Business-to-Business (B2B) and Business-to-Government (B2G) transactions, and significantly reduce administrative burdens. This modernisation aligns seamlessly with broader European Union movements under the VAT in the Digital Age (ViDA) initiative, specifically targeting the reduction of tax fraud and the streamlining of VAT processes.
Belgium’s approach employs a decentralised Continuous Transaction Control (CTC) model, meaning invoices are not cleared by tax authorities before reaching the recipient. Nonetheless, non-compliance can lead to steep fines, including of up to €5,000 per invoice, denial of VAT deductions, and increased scrutiny. This underscores the critical importance of accuracy, timeliness, and full adherence to the regulations.
Unpacking the Timeline: Key Milestones You Cannot Afford to Miss
The rollout of Belgium’s e-invoicing mandate follows a clear, multi-phase timeline that affects various business interactions:
• 1 March 2024: E-invoicing became mandatory for all B2G transactions, specifically for public contracts published after this date.
• 1 January 2026: E-invoicing becomes mandatory for all B2B transactions, replacing traditional invoice formats with structured electronic invoices under Peppol BIS 3.0. This is a critical deadline for all businesses engaging in B2B activities in Belgium.
• January 2028: Belgium plans to introduce near real-time e-Reporting based on the Peppol 5-Corner Model. This transformative step will require businesses to electronically report transaction data in near real-time to tax authorities, effectively eliminating the annual sales listing requirement and further combating VAT fraud by providing up-to-date transactional data. The Federal Coalition Agreement, finalised on 31 January 2025, confirms this commitment.
Both resident and non-resident businesses with a Belgian Fixed Establishment must comply. Non-resident entities without such an establishment will be able to receive structured e-invoices from Belgian counterparts.
Operationalising Compliance: What Your Teams Need to Know
Navigating these new requirements demands a collaborative effort across your organisation, from finance and IT to tax and operations.
For Tax and VAT Managers: Your primary focus will be ensuring full compliance with the Belgian tax framework and Peppol standards. This involves understanding the nuances of the Peppol BIS 3.0 standard – the only format that ensures compliance with both Belgian and EU regulations. You’ll need to monitor regulatory changes closely, as detailed guidance has been published by the Belgian Tax Authorities (FPS Finance). Furthermore, you’ll need to guide your teams on the implications of near real-time e-reporting from 2028, which will fundamentally change VAT practices.
For CTOs, Heads of IT, and Tax Technology/Transformation Leads: The technical backbone of your organisation will be instrumental in this transition. Invoices are transmitted through the Peppol network, specifically using Peppol BIS 3.0. While a temporary platform, HERMES, may be available for businesses not yet fully transitioned to Peppol, the ultimate goal should be automated invoice submission through certified Peppol Access Points. This automation is crucial for businesses managing high volumes of transactions, ensuring compliance and significantly improving operational efficiency. You’ll need to ensure your invoicing systems are aligned with Peppol BIS 3.0 standards, which specify up to 55 mandatory data fields, including seller/buyer details, VAT breakdown, and payment terms. Although digital certificates are not explicitly required, the authenticity, integrity, and legibility of e-invoices must be guaranteed throughout their lifecycle, a requirement inherently met by secure transmission through Peppol access points.
For ERP Specialists: Your role is central to implementing the necessary system changes. You’ll be responsible for ensuring that your invoicing systems can capture and submit all required data fields accurately. Data remediation will be critical to prevent inconsistencies or missing data that could lead to validation failures or non-compliance during audits. The Peppol BIS 3.0 standard supports e-invoices, credit notes, and debit notes, all of which must conform to these specifications and be processed within the same workflow to ensure uniform compliance.
For Finance Teams (OTC, P2P, GL, CFOs): The shift to e-invoicing presents both challenges and opportunities for financial operations.
• Order to Cash (OTC) and Procure to Pay (P2P) teams must implement robust processes for approval management and handling exceptions, particularly for credit or debit notes. Ensuring that any self-billed invoices comply with Peppol standards and are fully integrated into your invoicing processes is also key. Manual entry via the HERMES portal may be a stopgap for lower invoice volumes, but robust processes and audit trails must be established if automation is delayed.
• GL teams and CFOs will benefit from the improved transparency and efficiency that e-invoicing brings. E-invoices must be archived for seven years in Belgium, and while Peppol-compliant invoices facilitate storage and retrieval through structured, machine-readable formats, businesses remain responsible for maintaining their records in an auditable format. Implementing structured archiving processes is therefore essential for audit readiness.
Strategic Advantage: Leveraging Financial Incentives
The Belgian government is actively supporting businesses in this transition through significant financial incentives. This is a crucial consideration for CFOs and Heads of Finance:
• Increased Investment Deduction: As of 1 January 2025, the investment deduction for digital investments will rise to 20%.
• Increased Cost Deduction: Between 2024 and 2027, businesses can benefit from an increased cost deduction of 120% on investments and expenses specifically related to e-invoicing, encompassing software, technology upgrades, and consultancy fees. Sole proprietorships and SMEs can enjoy a deduction increase from 10% to 20% for expenditures made after 1 January 2025.
These financial incentives are time-limited, underscoring the importance of acting swiftly to benefit from the support available before the mandatory B2B compliance deadline of 1 January 2026. Adopting structured e-invoicing sooner can not only reduce last-minute pressures but also allow businesses to gain operational efficiencies earlier.
The Road Ahead: Proactive Planning is Paramount
Belgium’s e-invoicing initiative is a critical step in its digital transformation journey, aiming to improve tax system efficiency, reduce fraud, and streamline compliance processes across the European Union. The introduction of near real-time e-reporting by 2028 via the Peppol 5-Corner Model further solidifies this commitment.
For all businesses and their advisors, the message is clear: proactive planning is vital for smooth compliance. This means:
• Understanding and adhering to the compliance deadlines for B2G and B2B transactions.
• Ensuring your invoicing systems fully align with the Peppol BIS 3.0 standard.
• Prioritising automation through certified Peppol Access Points to mitigate non-compliance risks and enhance operational efficiency.
• Developing robust processes for data accuracy, exception handling, and secure archiving.
The penalties for non-compliance are significant, highlighting the importance of accuracy, timeliness, and full adherence to the regulations. Embracing this change now will not only ensure compliance but also position your business for enhanced operational agility and improved financial transparency in the evolving digital tax landscape.
How RTC Can Help You Navigate Belgium’s e-Invoicing Mandate
At RTC, we understand the complexities of evolving tax regulations and the challenges businesses face in adapting their systems and processes. As a leading provider of tax technology solutions, we are uniquely positioned to guide you through Belgium’s mandatory e-invoicing framework.
Our expertise, rooted in our Global Tax Digital Reporting Series, enables us to offer actionable insights and practical solutions. As a certified Peppol Access Point in Belgium, we provide seamless integration with the Peppol network, ensuring your e-invoicing processes are compliant and streamlined. We specialise in delivering customised compliance assessments to evaluate your current systems and needs, followed by end-to-end support from initial setup to long-term maintenance and audit assistance, including preparation for the near real-time e-reporting phase.
Our core mission is to bridge the gap between tax, IT, finance, and operations, ensuring that compliance is integrated seamlessly across your business. We offer solutions designed to enable real-time clearance and support your digital transformation journey, ensuring your business not only meets tax requirements but also benefits from operational efficiency and improved business partner relationships. With RTC Suite solutions on SAP BTP, we simplify your e-invoicing process, allowing you to understand, implement, and manage your e-invoicing strategy with confidence.
Don’t get left behind. Contact us today to ensure full preparation for Belgium’s e-invoicing mandate and embrace a more digital and efficient future in tax compliance.
