What to do if you suddenly become subject to VAT

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When you first started your freelance business in Belgium, you might not have been expecting to make a considerable amount of money. That VAT-registration threshold of €25,000 may have initially seemed very distant. But what happens if you’re fast approaching that limit, or you've just exceeded it? Should you start charging VAT immediately? And what needs to happen for you to be able to do that? In this article, we’ll guide you through the questions and steps to take.

1. When do you become subject to VAT?
2. What to do if you become subject to VAT: a step-by-step plan
3. How does VAT declaration and payment work?
4. Worth knowing

When do you become subject to VAT?

In principle, all self-employed people in Belgium are subject to VAT (with the exception of a selection of paramedical liberal professions).

When you started your activity, you chose to request a VAT exemption for small businesses. That meant that until now, you didn’t have to charge VAT on your sales. However, once you achieve a turnover of more than €25,000 per year, you no longer qualify for this exemption, and you become subject to VAT.

If you work with an accountant, they’ll be monitoring this limit for you. But that doesn’t mean it’s not also your responsibility to keep an eye on your turnover and take immediate action when you earn more than €25,000 per year from your self-employed activity.

💡Accountable tip: Our app tells you precisely when you’re about to exceed the €25,000 mark and become subject to VAT, allowing you to avoid an unpleasant surprise.

Extending your activity to offer certain other services may also mean you need to start charging VAT. In the following three sectors, you must always charge VAT:

👷 Construction work (construction, landscaping, sanitary work, etc.)

♻️ Certain waste treatment activities

🧑‍🍳 Catering activities with a registered cash register system (a ‘white’ cash register)

Finally, it’s also possible that, as a liberal professional, you start to carry out new activities for which you must charge VAT. If this is the case, you become subject to mixed VAT.

What should you do if you become subject to VAT?

Let's take an example: suppose that in mid-March, you issue an invoice that takes you over the €25,000 threshold. What exactly should you do? Let's look at this step by step.

1. Subject to VAT from the first euro

Don’t wait until the start of a new quarter to meet your VAT obligations. From the first euro that exceeds €25,000, you’re subject to VAT. That means you must collect VAT, even if this happens in the middle of a quarter.

2. Inform the VAT authorities

You (or your accountant) needs to immediately inform the VAT authorities that you are no longer exempt from VAT. You do this by completing form e604B via MyMinfin (‘modification of VAT activity’).

3. What about your VAT number?

You already have a VAT number, because when you became self-employed you were given a unique company number. The VAT number is therefore identical to this company number, but preceded by ‘BE’.

When you started your self-employed activity, you already activated this VAT number, even though you opted for the VAT exemption scheme for small businesses. You actually needed your VAT number to submit your client listing, among other things.

Your VAT number is therefore already activated, but you still mustn’t forget to inform the VAT authorities (see previous step).

4. Start collecting VAT

As a VAT-registered entrepreneur, you must collect VAT from your customers and remit it periodically to the tax authorities.

From now on, your VAT number must appear on every invoice and you also need to apply the correct VAT rates on your products and/or services.

As always, you must keep all sales invoices up to date to be able to calculate the amount of VAT you’ve collected. You also need to keep purchase invoices to be able to recover the VAT paid.

The amount of VAT you must pay to the state is the difference between the VAT you invoiced to your customers and the VAT you paid to your suppliers.

💡Accountable tip: Afraid of making mistakes? Simply scan all your incoming and outgoing invoices with the Accountable app and we’ll prepare a flawless tax return for you. It can be as simple as that.

5. Your first VAT declaration

Some entrepreneurs submit a VAT return every month, but as a self-employed person who has just become subject to VAT, a quarterly declaration is sufficient.

This means you need to submit the VAT return by the 20th day of the month following the quarter in which you collected the VAT. So, before April 20, July 20, October 20 and January 20.

In reality, these dates may vary each year. They're never earlier, but sometimes you have a little more time. Check this article for specific dates for this year.

How does VAT declaration and payment work?

Suddenly becoming VAT registered may seem complicated, but don't worry, with the following action plan and Accountable, your first VAT return will be easy to manage.

Follow these steps to correctly submit your VAT return. 👇

🧾 Check if all purchase and sales invoices are correctly processed in your accounting.

💻 Generate your VAT return via Accountable.

🪪 Log in to Intervat in your own name.

📁 Upload your files and sign the declaration.

⭐️ Pay the VAT due or request a refund.

Was that a bit too fast? In this article, you’ll find a detailed action plan with screenshots and a video showing exactly how to declare and pay VAT.

Worth knowing

• If you issue invoices for sales outside Belgium, other VAT rules apply. This is also the case for purchases abroad. In the EU, the reverse charge applies, unless you’re sellling to individuals. Outside the EU, you don’t have to charge VAT.
• Additionally, you may need to consider the impact of your new situation on your pricing. Because you now have to charge VAT, you’re faced with an important choice: keep the same price and earn less, or increase your prices to maintain your margin. The latter is financially more attractive, but your customers may not appreciate it.

Are there any advantages to being subject to VAT?

You may find it hard to believe, but being subject to VAT also has certain advantages:

🔙 You can now recover the VAT paid on your purchase invoices.

🤵 A company with a VAT number appears more professional.

⛰️ You have no more limits or restrictions. Now you can really go for it!

Did you just become subject to VAT? Let's recap 

• If you have a turnover of more than €25,000 per year, you become subject to VAT.
• When you’re subject to VAT, you need to collect VAT and remit it to the tax authorities.
• Your VAT number and correct VAT rates must appear on every invoice.
• Submit your periodic VAT return before the 20th of the month following each quarter.
• Pay any VAT owed on time.
• Special VAT rules apply for international trade, such as the reverse charge mechanism.

At Accountable, we do everything we can to keep your administrative burden to the minimum. The Accountable app automatically prepares your VAT return, so all you have to do is download it and then upload it to Intervat. Try Accountable for free to see how it works.

Author - Valesca Wilms

As content marketing lead at Accountable Belgium, Valesca writes about freelancing, self-employment, and taxes based on her own experience as a freelancer.

Who is Valesca ?