How to invoice clients as a Small business (Franchisee)?

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You are a SmallBusiness (Franchisee regime)? You have probably noticed that the app automatically adds a legal note on your invoices.

It may be confusing at first, but the rule is simple. We explain how invoicing works for you below.

What is the Franchisee regime?

Anyone who sets up their own business in Belgium is generally obliged to charge VAT on their products or services and pay it to the FOD (tax office). However, there is an exception that exempts from paying VAT: the Franchisee regime.

As a Franchisee, you do not charge VAT to your clients.

This can be beneficial: when selling to private individuals in Belgium, you will be more competitive, as not charging VAT will mechanically "lower" your prices by 21%.

This is possible if you don’t exceed the income limit of 25.000 € per year (only taking into account your revenue made to clients in Belgium). In this case, you can (it's optional and not mandatory) ask to benefit from the Franchisee regime.

Read this article if you want to know more about obligations to change status from Franchisee to Subject to VAT.

What should I write on the invoice when selling to clients in Belgium 🇧🇪?

In order to be legally correct, your invoice should mention why you do not charge VAT: "Special VAT exemption scheme for small enterprises".

The app will add this automatically when you create invoices:

How about sales outside of Belgium and within the European Union (EU) 🇪🇺 ?

N.B.: note that intra-EU income from B2B clients is not included in your profit limit of 25.000€.

Sales of Services (B2B)

Both you and your client must have a valid VAT number.

Sales of Services are made under the reverse-charge regime. Your invoice must mention the related article: "Reverse Charge - art. 196 VAT Directive 2006/112/CE".

The app will add the phrase automatically based on the item category:

You will need to file an additional tax report dedicated to such transactions: the intracom listing, to be filed every quarter on Intervat.

Sales of Goods (B2B)

The invoicing is usually quite simple. You issue your invoice without VAT and refer to your status as a Franchisee ("Special VAT exemption scheme for small enterprises").

In the app, the system will add the correct phrasing automatically based on the item category:

Sales to private individuals (B2C)

When you sell to a private individual in Europe, your invoice is similar as when you sell in Belgium. It must include the reference to the Franchisee regime ("Special VAT exemption scheme for small enterprises").

In the app, the sentence is added automatically.

Note that in this case, you don't have to mention the name of your clients in the B2C transaction

How about sales outside of the European Union (EU) 🌍 ?

When you sell goods, a legal note will be added onto your invoice stating "Article 39 - Export of goods".

When you sell services, a legal note will be added onto your invoice stating "Article 39 - export of services". N.B. If you make a significant income from B2C sales in one country, you may need to register as a business locally and collect/pay local VAT.

Reach out to out support team if you have any questions

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 ?