On 5 January 2024, the Belgian government submitted a long-awaited draft law (available in Dutch and French) to parliament, which would amend the VAT Code to introduce an electronic invoicing (“e-invoicing”) obligation. If enacted, the law would establish a broad requirement for the exchange of structured electronic invoices (“e-invoices”) between taxpayers with effect from 1 January 2026.
For this legislative proposal to be enacted, the government must apply to the European Commission for a derogation from the EU VAT directive and successfully navigate the draft legislation through the parliamentary process.
Mandatory business-to-business (B2B) e-invoicing
After several pre-draft bills, Belgium has officially published a draft law mandating the use of e-invoicing for certain transactions (see “In-scope transactions,” below). At this stage, the draft law only contains an e-invoicing obligation, however it is expected that a reporting obligation (“e-reporting”) will also be introduced at a later stage.
Scope and exclusions
Overview
The e-invoicing mandate would apply to domestic transactions between the majority of taxpayers registered for VAT in Belgium.
In-scope entities
Belgian-established VAT registered entities, including VAT groups, small and medium enterprises (SMEs), and agricultural enterprises would need to be able to issue and receive invoices in the defined structured electronic format.
According to the draft, foreign entities registered for VAT in Belgium but with no Belgian establishment would also need to be able to receive structured e-invoices where they are required to communicate their Belgian VAT number to a Belgian-established supplier.
In-scope transactions
The B2B e-invoicing mandate would apply to domestic transactions, i.e., transactions that are located in Belgium for VAT purposes, except for operations performed by foreign suppliers for which the recipient is liable to pay the Belgian VAT (as these transactions are not subject to the Belgian invoicing rules).
Transactions that are subject to a VAT exemption under article 44 of the Belgian VAT code (i.e., an exemption without the right to deduct) would not be within scope of the e-invoicing obligation, nor would cross-border transactions initiated by Belgian taxpayers (unless the transaction is an export of goods where the buyer must provide its Belgian VAT number to the supplier).
E-invoicing framework
The electronic exchange framework preferred by the Belgian VAT authorities is Pan-European Public Procurement Online (PEPPOL). This framework, already used for business-to-government (B2G) e-invoicing in Belgium, would become the default standard that all taxpayers would be required to adopt. As such, the standard e-invoice format would be the PEPPOL-BIS format. Entities would be able to mutually agree to use other frameworks or standards, as long as these comply with the relevant European standard (EN 16-931).
To ease the transition, businesses that do not yet have the technical capability to receive structured e-invoices could temporarily rely on the Belgian public platform HERMES. This platform would be a backstop system enabling e-invoices to be sent even if the receiver was not yet registered with PEPPOL.
Supporting tax measures
In order to address businesses’ concerns with respect to the investment required to comply with the proposed new e-invoicing obligations, some supporting fiscal measures are foreseen.
An increased cost deduction of 120% will be introduced for SMEs for costs incurred in implementing invoicing packages that enable structured e-invoicing, as well as for related consultancy costs. This measure would apply from the 2024 through 2027 financial years.
Additionally, companies performing digital investments with respect to invoicing can benefit from the increased investment deduction of 20%, that would be extended to cover digital investments with respect to invoicing, customer relationship management (CRM), e-commerce, and cyber security as from 1 January 2025.
What does it mean for businesses?
Businesses should start preparing for this new mandate as soon as possible and leverage this opportunity to reassess their digital strategy for the future, while exploring solutions that are tailored to their company's unique requirements. In Deloitte (Legal) Belgium’s experience, the introduction of e-invoicing may serve as a catalyst for the transformation and automation of a business’ tax and finance processes.
Key contacts
Tim Wustenberghs
Tim is Partner in Deloitte Legal's Tax Advisory team of lawyers. His main focus is on corporate international tax, although he is also keen on handling real estate matters and registration duties as well. The tax advisory team headed by Tim has extensive expertise as a general tax advisor for numerous companies thereby assisting them with their (inbound) investments, reorganisations, holding activities and financing structures. They have also considerable experience in handling ruling requests with the Belgian tax administration. Tim has published numerous articles that span the legal domain of fiscal matters, touching upon subjects that include business restructurings, transfer pricing, permanent establishments, tax planning restraints and registration duties.
