We would like to draw your attention to one of the yearly Belgian VAT compliance obligations. In Belgium, it is required to make an annual prepayment to the Belgian VAT authorities by the 24th of December (the so-called ‘December prepayment’).
The amount of the annual prepayment is determined based on the amount of Belgian VAT which becomes due during the last reporting period of 2019 (i.e. the fourth quarter or the month December of 2019). More specific, there are two methods foreseen to determine the amount of the December prepayment:
Actual amount of VAT due: The Belgian VAT which became due (i.e. amount of payable VAT – amount of deductible VAT) in the period between the 1st of October 2019 and the 20th of December 2019 (quarterly VAT reporting), or the Belgian VAT which became due between the 1st of and 20th of December (monthly VAT reporting).
VAT due in the previous VAT return (recommended method): To reduce the administrative burden, the Belgian VAT authorities accept that the amount of the prepayment can be the same amount as the amount of Belgian VAT which became due in the previous reporting period (i.e. the amount mentioned in box 71 of the Belgian VAT return).
Hence, by applying this calculation method, it is possible to pay the amount paid with respect to the third quarter of 2019 (in case of quarterly reporting) or November 2019 (in case of monthly reporting). In case there was no Belgian VAT due in the previous reporting period (i.e. no amount reported in box 71, or the amount mentioned in box 71 amounted to 0), it is not required to make a prepayment to the Belgian VAT Authorities.
Please inform us which method you will apply to calculate the December prepayment, as it impacts the Belgian VAT reporting for the last reporting period (fourth quarter or the month December) of 2020.
The prepayment has to be done by the 24th of December at the very latest. Please note that late payment interests are due in case the Belgian VAT authorities should receive the prepayment after the 24th of December. Hence, we would recommend to do the prepayment as soon as possible.
The December prepayment has to be paid to the Belgian VAT authorities, using the same bank account details and mandatory payment reference as in case of normal VAT payments (we refer to our earlier e-mails concerning the periodic VAT compliance obligations in this regard).
Please do not hesitate to contact us in case of any questions or remarks in this respect.