Belgium is set to join a growing number of countries in adopting e-Invoicing mandates. This move is aimed at reducing the VAT gap – a major issue where billions in taxes are going uncollected. The goal is to make things simpler and more efficient for businesses, helping them save costs and get paid faster.
Change in Plans
Initially, Belgium wanted to introduce e-Invoicing slowly, starting with big companies. But now, all VAT-registered businesses must start using structured e-Invoices for local B2B transactions from January 1, 2026. This decision, influenced by the European Commission, also suggests that we might see mandatory digital reporting in the future.
Belgian e-Invoicing System Explained
The B2B e-invoicing rules in Belgium are similar to those already used in government procurement (B2G) since 2019. Invoices must be in the PEPPOL BIS 3.0 format and sent over the PEPPOL network, though there are some exceptions if both parties agreed to use the format of the 2014/55 EN standards.
If the recipient of the e-Invoice does not have sufficient technical and technological infrastructure, they will be able to use the HERMES platform free of charge as a valid solution until 2026 and receive invoices. The recipient of the invoice can get the e-invoice by e-mail in PDF format, regardless of the technical format in which it is sent.
When Do You Need to Use e-Invoicing?
The requirement to use e-invoicing depends on three main factors:
- Who’s Issuing the Invoice: The issuer must be VAT registered in Belgium. There are certain exceptionslike bankrupt legal entities and some agricultural branches.
- Who’s Receiving the Invoice: The recipient must accept e-invoices if they use a VAT number for the transaction.
- What’s the scope of the Law: The rule mainly applies to taxable goods and services sold in Belgium, with some limitations.
Rules for VAT Groups
Members of VAT groups have to accept e-Invoices too, and even transactions within a VAT group need a structured e-Invoice.
Waiting for EU Approval
Belgium’s e-Invoicing law that submitted to EU Commission on October 6 2023, still needs the green light from the EU Commission. Given that other EU countries have similar rules, Belgium is likely to get approval.
Help for Businesses
The government is offering tax breaks to encourage businesses to adopt digital tools for e-Invoicing:
The discount on some expenditure items for sole proprietorships and SMEs will be increased from 10% to 20% for the digitalization of e-Invoicing. This incentive will apply to expenditures and investments to be made after January 1, 2025.
Between 2024-2027, 120% incremental cost deduction will be applied to investments and expenditures made only in the context of e-Invoicing. This will include e-Invoicing service providers and consultancy fees up to a certain level.
Impact on Businesses
This shift to e-invoicing is a big deal for both the tax authorities and businesses. Companies should see this as a chance to get better control over their VAT processes.
Conclusion
Belgium’s move to mandatory B2B e-Invoicing marks a big change in how VAT is managed. It’s all about making things more streamlined and transparent. VAT Consult is here to help businesses get ready for this change.
For more information on how to get your business ready for e-Invoicing, get in touch.
