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Increase Belgian VAT registration bank guarantee obligations

Belgium has increased(Royal Decree nr. 31) the financial guarantees required on non-EU (‘third-country’) businesses with a local non-resident VAT registration. Typically, this includes appointing a Fiscal Representative unless the third-country has a mutual assistance agreement with the EU (e.g. Norway and the UK).

Existing Non-EU VAT registration guarantee

Currently, the Belgian tax office has to right to charge 25% of the estimated annual VAT liability. However, the amount was often set at just €7,500.

Increase financial guarantee

The new guarantee levels demand by the state will be:

  • 10% of the estimated annual VAT liability; or
  • Capped within a range of €7,500 to €10million.

Raised guarantee to apply only to new Belgian VAT registrations?

These new rules will apply for newly registered non-EU VAT registrations until the second December after the registration was issued. The tax office will then review any change to reflect the tax risks. It is unclear whether the VAT administration will impose the new guarantee requirements on already registered VAT taxable persons who have not yet placed a (sufficient) guarantee. Taxable persons who already have a guarantee in place, calculated at 25% of the estimated VAT amount due for a 12-month period, must examine whether they will request a reduction of the guarantee, which will be equal to 10% of the VAT amount due, with a minimum of EUR 7,500 and a maximum of EUR 1 million.

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