For which small enterprises?
You are eligible for the VAT exemption scheme if:
- Your enterprise has an annual turnover of less than 25,000 euro, excluding VAT, in Belgium, and
- You are not engaged in any of the following sectors:
- Construction and related sectors
- Hospitality businesses that are required to use electronic cash registers
- Delivery of used materials
Both individuals and companies are eligible for the exemption scheme.
Which VAT obligations are waived?
If you choose the exemption scheme, you must:
- Not charge VAT
- Not submit monthly or quarterly declarations
- Not remit VAT to the treasury
Important
If you opt for this scheme, you do not have to charge your customers VAT; however, you also cannot deduct any VAT that you have paid to your suppliers.
Which vat obligations remain?
Even as a small enterprise, you must adhere to certain minimal obligations, such as:
- Informing the VAT administration about the start, change, or cessation of your activities
- Always mentioning the “special exemption scheme for small enterprises” on your invoices
- Keeping and numbering incoming and outgoing invoices, or maintaining an invoice book
- Submitting an annual customer listing, i.e., a list of VAT-liable customers to whom you have invoiced more than 250 euro for services or goods
- If you have provided services or goods in an EU member state, you must also submit a list here annually
- Reporting the total amount of goods and services you provided in the previous calendar year to the administration by March 31 of each year
When can you choose this scheme?
At the start of your enterprise
When you start your enterprise, it is advisable to estimate your expected turnover for the first twelve months. If you do not reach 25,000euro, you can choose the VAT exemption scheme directly at your start declaration. While it is not mandatory, it can reduce your administrative workload.
When might the VAT exemption not be the best choice?
- For large investments or high costs: You cannot reclaim VAT on purchases of expensive installations, vehicles, or other acquisitions.
- For sales to VAT-liable companies: Some VAT-liable customers prefer to receive invoices with VAT so they can recover the VAT.
- For expected rapid growth: If you anticipate quickly exceeding €25,000 in turnover, it may be simpler to start as VAT-liable from the outset.
As an established entrepreneur
If you experience a decrease in your turnover and do not expect an increase in the near future, you have the opportunity to request a switch to the VAT administration four times per calendar year. In 2025, these moments are:
- Either before March 15 2025, if you want to apply the exemption on April 1, 2025
- Or before June 15 2025, if you want to apply the exemption on July 1, 2025
- Or before September 15 2025, if you want to apply the exemption on October 1, 2025
- Or before December 15 2025, if you want to apply the exemption on January 1, 2026
You must not exceed the 25,000 euro threshold in:
- The previous calendar year (for example, 2024 if you are applying in 2025)
- The part of the current year before you switch to the scheme
In your request, you must include:
- The turnover you achieved in the previous quarters
- The turnover you expect in the remaining quarters of this year
Your enterprise is growing significantly. Do you need to do anything?
The exemption scheme is a beneficial measure for small enterprises. If your enterprise is growing significantly, it is time to switch to the regular scheme. You will then need to start submitting monthly or quarterly declarations, but at the same time, you will benefit from the deduction of the VAT you have paid.
Limited tolerance margin, but keep a close watch
Growth can occur rapidly. Therefore, it is important that you, together with your accountant, monitor your turnover at least quarterly and check whether you will still remain below the threshold. The same applies if you – regardless of your turnover – switch to an activity for which no exemption is possible (see above: construction, recovery materials, mandatory electronic cash register, etc.).
If your estimate was not entirely accurate, be aware that there is a limited tolerance margin:
- If your turnover grows but exceeds the 25,000 euro threshold by less than 10% (i.e., less than 27,500 euro annually), you must report the change before December 15 and you will fall under the regular VAT scheme from January 1 of the following year.
- If your turnover grows significantly and exceeds the 25,000 euro threshold during the year by more than 10%, you must immediately report this to the VAT administration, and you will be subject to the regular VAT scheme.
Can you return to the exemption scheme?
When you leave the VAT exemption scheme, you can only return from January 1 of the second year following the switch. There is thus a waiting period of one calendar year before you could return.
Example
If you change your VAT scheme to start submitting quarterly declarations from October 1, 2025 (or January 1, 2026), you can then only return to the VAT exemption scheme from January 1, 2027, if all conditions are met.
How Securex helps you
Feel free to leave the communications to the VAT administration to your trusted Securex company desk. We will complete the VAT forms e604 for you and send them at the start, change, and cessation of your activities.
