Accounting and taxes

As a self-employed person you are solely responsible
for your accounting and tax obligations.

With the aid of a few useful tips, you should sail through the procedure. So read these pages carefully, and discuss it with your accountant and Securex.

• How do I pay my taxes in my capacity as a self-employed person?
• Do I have to keep books?
• Am I liable to pay VAT? If so, what does that entail?

How do I pay my taxes in my capacity as a self-employed person?

The law makes an important distinction between companies and sole proprietors:

• the profit from a company is taxed under the corporate tax system;
• the income from a sole proprietorship is taxed under the personal taxation system.

This has a significant impact: personal taxes are usually higher than corporate taxes and increase as you earn more. Corporate tax is set at 33%.

Pre-tax payments to the Inland Revenue
As a self-employed person you pay your taxes approximately once a year after year end. In other words, at the end of 200X you pay taxes for 200X-1 (e.g.: That means, at the end of 2009 you pay taxes for 2008).
Because of this time difference, the Inland Revenue increases your taxes at the moment of payment. The best way to avoid this is by making pre-payments. You calculate your expected profit per quarter, and calculate the taxes you need to pay on that sum. You then send this amount to the Inland Revenue by the specified deadline. If it turns out that you have paid too much, the Inland Revenue will reimburse you with the difference, with a healthy interest on top.
The deadlines for the four quarters are: 10 April, 10 July, 10 October and 20 December.

Additional taxes
In addition to your corporate or personal tax, you will also pay a number of additional taxes. These consist mainly of community tax, additional crisis contributions, environmental taxes, …

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Do I have to keep books?

Every business must carry out a certain amount of book-keeping. The accuracy with which you have to record all transactions increases as your business grows. The law distinguishes between three types of businesses:

• Small businesses: sole proprietor, vof and gcv with an annual turnover of less than €495,787.05 excl. VAT.
  As a small business you only need to do single entry book-keeping:
  • keep an up-to-date account book for all income and expenditure in cash;
  • keep an up-to-date bank book for all money transfers to your bank or postal account.
  • keep an up-to-date purchase book containing all invoices and credit notes from suppliers;
  • keep an up-to-date sales ledger containing all invoices to clients;
  • draw up an annual inventory of all possessions, claims, debts, rights and duties of any kind and of any of your own resources tied up in the running of your business.
• Medium-sized businesses: businesses with less than 100 employees that fulfil at least two of these criteria:
  • an annual turnover of less than €7.3 excl. VAT;
  • a total balance less than €3.65 million;
  • on average fewer than 50 employees.
• Big businesses: any business with more than 100 employees. And any businesses that do not fulfil the criteria for midsize businesses.

As a medium-sized or big business you must operate with a double-entry book-keeping system. You have the same duties as a small business (single-entry book-keeping), as well as a few additional obligations:

• keeping an up-to-date book-keeping system in which all financial transactions are listed chronologically;
• keeping an up-to-date accounting system according to an adapted standardised accounting plan;
• drawing up an inventory book with a detailed inventory according to the accounting plan;
• drawing up annual accounts with a balance sheet, profit and loss statement, and social balance sheet. These annual accounts must be submitted within 30 days of approval by the General Assembly to the National Bank.

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Am I liable to pay VAT? If so, what does that entail?

Almost every self-employed person exercising a commercial activity is liable to pay VAT. This means that you must calculate VAT on the goods and services you offer your customers. That total amount must be repaid to the Inland Revenue every quarter, minus the VAT amount you yourself have spent on goods and services you need for your business.

General obligations as a VAT-liable person

• inform the VAT monitoring office that you have started, changed or ceased a commercial activity. Contact your Securex Company Desk and we will help you!
• Charge VAT on all invoices for delivered goods and services, including those to private individuals;
• make a declaration of the VAT receipts. This should be done monthly, unless your annual turnover is less than €1,000,000, in which case quarterly declarations will do.
• pay the VAT owed to the State for the preceding month or three months;
• keep VAT records appropriate for your business.
• submit a list annually before 31 March of all VAT-subject customers to whom you have delivered goods or services in the past year;
• keep an up-to-date table of company resources.

Fixed VAT calculation
If you are hairdresser, baker, butcher, café owner, pharmacist or fish or dairy retailer, or are practising a similar profession in which you supply mainly individuals, then you do not need to back up your VAT calculation with invoices. Simply make a calculation on the basis of your purchases and your delivered performances.
Moreover, the fixed amount only applies to small businesses with an annual turnover of less than €750,000. Three quarters of this turnover must originate from sales to individuals.

VAT exemption
If your turnover is less than €5580/year, then you do not need to charge VAT on your invoices.

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