In order to simplify accounting and tax obligations for small businesses, the tax office provides an optional VAT exemption regime.
If your annual income is below €25.000, you can request this status. For this threshold, only income subject to VAT should be taken into account, meaning income made in Belgium or in the EU.
As a Franchisee, you would not have to do the following:
Collect VAT on sales (i.e., charging VAT to the clients)
Pay VAT to the state
Submit Periodic VAT returns
Also, you cannot deduct VAT from your business expenses
The benefits can be:
your accounting will be very simplified (you will only have to submit a yearly income tax and a yearly client listing)
you don't charge VAT, meaning your prices can be more competitive when selling to private individuals
You don't deduct VAT on your purchases > this is only interesting if you don't have any major expenses to make in Belgium (investments, equipment, etc.).
Annual turnover limit: If your annual sales (as defined below) do not exceed €25,000 excluding VAT, you can opt for the small business exemption scheme. Under this system, you don't have to charge VAT to your customers.
VAT exclusion: Under this regime, you will not have to charge VAT and do periodic VAT returns and
Eligibility requirements:
Annual sales must not exceed €25,000.
Certain activities are excluded (e.g. VAT unit, construction companies, provision of furnished accommodation subject to VAT, certain activities subject to VAT in the Horeca sector).
This concerns all supplies of goods and services that are subject to VAT when the Franchisee regime is not applied. The VAT rate used is not important.
Exports and intra-Community deliveries that are VAT-exempted.
Income from VAT-exempted property rental.
Sale of investment goods (e.g., a car sold by the company).
Services provided outside Belgium, such as consulting for a company established in another EU member state, are subject to the general B2B rule. This means the service is considered to be located in the country where the recipient is established.
Services exempted under "art. 44 CTVA" (e.g. therapeutic medical services), except for VAT-exempt property rental and non-therapeutic medical services.
💡 In summary, to determine whether you qualify for the small business exemption scheme, you need to consider your annual sales excluding VAT, including certain VAT-exempt transactions, but excluding other types of income as indicated above. The €25,000 threshold is crucial, and exceeding it has specific implications for VAT handling. |
If your annual turnover exceeds €25,000, you normally lose the benefit of the VAT exemption scheme and must switch to the ordinary VAT regime.
Exception – tolerance up to 10%:
If the excess does not exceed 10% (maximum €27,500), you may keep the exemption until the end of that calendar year.
From 1 January of the following year, you will be subject to the normal VAT system.
Example: In 2025, your turnover reaches €26,750 (7% above). You may keep the exemption for 2025, but from 1 January 2026 you must apply the normal system.
Exceeding by more than 10%:
You must switch immediately in the year when the threshold is passed, starting from the transaction that caused the excess.
Example: If you exceed €27,500 in 2025, you switch to the ordinary VAT system right away in 2025.
A one-off administrative tolerance applies: if you exceed the threshold by ≤10% in 2024, you may still keep the exemption for 2024 and 2025.
Always contact the FPS Finance (SPF Finances) when you exceed or approach the VAT franchise threshold. Request their written confirmation regarding your VAT status and keep it carefully.
🚨 The €25,000 threshold is for a full year, i.e., 365 days. If you start your self-employed activity under the VAT franchisee status in the middle of the year, then the threshold is calculated pro rata for the remaining period. |
🚨🚨 Important rules when switching status: The first invoice exceeding the €25,000 threshold is fully subject to the ordinary VAT system, requiring the corresponding VAT to be invoiced. It is important to note that this change has no retroactive effect, meaning that invoices issued previously remain unchanged. Now that you are entitled to deduct VAT, you can also reclaim VAT already paid in the past. |
💡 Under certain conditions, and if certain formalities are complied with: it is, moreover, possible to reclaim a portion of the VAT you paid when you were under the franchisee regime (at that time, VAT reclaim was not allowed): 💡 Goods and services not used or consumed at the time of the change of regime, such as small office equipment. 💡 As well as investment goods, are eligible for restitution provided they remain usable at the time of the change of regime and the 5- or 15-year revision period has not expired. 🚨 It is crucial for your right to deduction to note that this restitution is conditional on the presentation of an inventory of stock existing at the time of the change, accompanied by a list of capital goods still in use at that time. These documents must be submitted in duplicate to the VAT control office, within 3 months of the change of tax regime (Royal Decree no. 19, article 7). |
🚨 Once you leave the VAT exemption scheme (voluntarily or due to exceeding the threshold), you can only return to it from 1 January of the second year following the change, provided you meet the conditions again.
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All you have to do is complete a VAT identification amendment declaration (form 604B), either yourself online here or via your enterprise counter.
1️⃣ Open the menu in the app.
2️⃣ Go to settings.
3️⃣ Access Tax settings.
4️⃣ Under VAT type, select "Subject to VAT".
✅ Your status is now updated!
→ Submit the Intra-EU listing if necessary. All the steps are in this article.
→ If a supplier from another EU country, has invoiced you under the intra-EU reverse-charge system, then you must declare and pay VAT via the special VAT return (declaration 629). You will find all the information you need in this article.
→ Submit your annual client listing if required.
⚠️ Important change from 2026:
How to submit a nil client listing in Intervat as a franchisee? |
💡 If you need to submit both of the above obligations, they will appear in the Taxes screen of Accountable. |
→ Submit your annual client listing if required. All the steps can be found in this article. Unlike, those who are subject to VAT, people under the franchisee regime do not have to submit an annual client listing if it is empty (nihil).
→ Of course, you must submit your annual income tax declaration.
Starting from January 1st, 2025, a double threshold will apply to benefit from VAT Franchisee status:
A national threshold, which remains fixed at €25,000 in Belgium.
A European threshold of €100,000, allowing small businesses established in another EU Member State to avoid local VAT registration under certain conditions:
Their turnover in their country of establishment does not exceed the national threshold.
Their total turnover across the EU remains below €100,000.
⚠️ Important:
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1. Notification to the tax authorities
In addition to the declaration of applying the small business scheme via form e604A or e604B, an additional notification is required to apply the exemption in other Member States.
Once validated, the Belgian VAT number will be extended with the suffix “EX” (e.g., BE 0123.456.789 EX).
The taxpayer must provide:
→ A list of the Member States where they wish to apply the exemption.
→ Their total turnover in Belgium and in each relevant Member State.
Any changes in this information must be notified in advance to the Belgian tax authorities.
2. Quarterly declarations applicable only for the 100K scheme applicants
Mandatory to monitor the exemption thresholds.
The business must declare its turnover in Belgium and in other Member States (indicate “0” if no activity was carried out in a country).
3. Annual client listing
Obligation for small businesses in Belgium.
New in 2025: total turnover must be declared in full, even if the clients do not have a VAT number.
Since January 1st, 2025, taxpayers can request to switch to the small business VAT exemption scheme every three months. Previously, this option was only available twice a year. The declaration to switch to this scheme (via the e604 application on MyMinfin) must be submitted no later than the 15th of the month preceding the change, which corresponds to the following dates: 15th December, 15th March, 15th June, and 15th September. |
🚨🚨 The European threshold is not automatic and must be requested through an additional notification. |
Category | Changes & Obligations |
New exemption thresholds | - National threshold: €25,000 (unchanged in Belgium). |
Non-EU businesses | - Do not benefit from the exemption. |
Notification to tax authorities | - Declaration via e604A or e604B to apply the scheme in Belgium. |
Quarterly declarations applicable only for the 100K scheme applicants | - Mandatory quarterly declarations to track the thresholds. |
Annual client list | - Obligatory for small businesses in Belgium. - New in 2026: Client listing should be submitted even if it is nihil |
Still not sure if you're a franchisee or not? Here's a video to help you find out.
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 ?Thank you for your feedback!
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