Author: Yonah De Waegeneer

As from 1 January 2026, Belgium introduces new and extended rules regarding VAT revision for renovation or improvement works carried out on immovable business assets. The Draft Act containing various provisions on VAT amends the relevant provisions of the Belgian VAT Code concerning VAT revisions.

Until the end of last year, renovation or improvement works (services) were in principle subject to a five‑year revision period, unless the works were so substantial that the renovated building Was to be considered as a newly constructed building (“reconstruction”). In such a case, the revision period increased to fifteen years. For the supply of new immovable business assets, the fifteen‑year VAT revision period always applied. Furthermore, a twenty‑five‑year revision period applied when the building is rented under the optional VAT leasing regime.

The Court of Justice of the European Union questioned the fundamental distinction between the revision period for services relating to immovable business assets (five years) and the supply of immovable property (fifteen years) in its Drebers judgment (C‑243/23 of 12 September 2024).

The Draft Act therefore extends the application of the fifteen‑year revision period for immovable business assets to “services that have characteristics comparable to those generally attributed to immovable business assets”. Whether renovation or improvement works fall under the fifteen‑year revision period depends on the useful economic life of the property after the works have rendered it into immovable form. Where renovation or improvement works to an immovable business asset result in the renovated building having the functions and characteristics of a new building, the fifteen‑year revision period will apply. In practice, this will have to be assessed on a case‑by‑case basis.

Although a new administrative circular has been announced, discussions between the VAT authorities and taxable persons are to be expected. The explanatory memorandum provides several indications of renovation works that may give the renovated building an economic useful life comparable to that of a new building and therefore subject to the fifteen‑year revision period:

• The construction works have lasted several years;
• The works as a whole have resulted in a substantial renovation of the building;
• Expansion works have been carried out, such as the addition of a glass outbuilding or an elevator shaft;
• The construction works involve a significant cost;
• The renovation and construction works have the same economic useful life as a new building.

Additional clarifications will, according to the explanatory memorandum, be included in the forthcoming administrative circular.

These new rules apply to any relevant change in the use of the affected services occurring as from 1 January 2026, regardless of the date on which the taxable event or the chargeability of VAT related to these transactions took place, provided that:

• the right to deduct has not become definitively acquired by the taxable person on 1 January 2026 under the current rules; and
• the VAT revision still falls within the revision period based on the new rules.

Although the new rules apply as from 1 January 2026, it is important to note that the administration may not rely on these rules to revive an revision obligation in favour of the Treasury when such an obligation had already definitively expired under the previous rules. Where the VAT revision period has already expired, this remains unchanged under the new rules. Conversely, in the case of an revision in favour of the taxable person, the taxable person may claim such an revision under the new rules for the years of the revision period that have not yet expired.