Monthly VAT refund for startups as of the 1st of January 2020
Under current Belgian VAT legislation, companies are only entitled to claim a refund of their VAT credit with the Belgian VAT authorities on a quarterly basis, unless the company has applied for and acquired a monthly VAT refund license. In practice, many companies do not meet the condition to apply for a monthly refund license. For start-ups, which often incur a lot of VAT on investment costs and only have a limited amount of VAT due on turnover realized, the prefinancing of VAT can result in a significant cost.
Startups should be supported as much as possible. Therefore, starting January 1st 2020, startups will be offered the opportunity to reclaim VAT credits, relating to VAT that became chargeable during the first 24 months after the start of the economic activity, on a monthly basis. To benefit from this new possibility, the startup must submit monthly VAT returns. In practice however, many startups currently opt to file quarterly VAT returns. In addition, the VAT credit must be at least 245 Euro before companies can request a VAT refund. These principles will be implemented in the Belgian VAT legislation. However, it is to be expected that the VAT authorities will issue additional guidelines with regard to the practical application of the new monthly VAT refund for startups.