Recoverable VAT also known as deductible VAT is of great importance for businesses.Indeed, the latter are able to recover the VAT paid on the expense reports incurred by their employees but due to lack of knowledge or lack of time, many companies do not deal with this subject.
The Rules to Be Applied
The applicable rules and recovery procedures can be complex, and sometimes long in processing, especially when they come from abroad.
It is in this context that the editor of the expense report management solution, and its partner, the leading European platform for online VAT recovery, are organizing this webinar on the theme of VAT recovery, where you will discover how to optimize, simplify and automate this process in France and abroad. Our experts advise you on the subject!
The recovery of VAT:It is a real subject as little known as it is complex and yet vital in this period, for the cash flow of companies.
If you want to get started, it’s important to know whether or not you’re subject to VAT and, if you are, at what rate. If you are subject to VAT, there will be quite a bit of administration to go through, but let’s start from the beginning. Using the business calculator is essential in this case now when it comes to proper calculation of these taxes.
What is VAT?
In Belgium, the VAT rate that applies for most products and services is 21%. On the other hand, for certain basic goods and services, the tax can be 12% or 6%. Here are a few examples:
- Since January 1, 2016, cosmetic surgery is no longer exempt from VAT and is subject to the rate of 21% VAT.
- Medicines are considered basic needs and are subject to the 6% VAT rate, in order to remain affordable for all.
- Hospital transport, on the other hand, is not subject to VAT.
Who is subject to VAT?
The liberal professions make their services available to the general interest. Their services are often essential, which is why a large number of them benefit from an exemption from VAT. For example: doctors, dentists, physiotherapists, midwives, nurses, orderlies and nurses, etc.
Please note: some other liberal professions do not benefit from an exemption from VAT and must therefore meet all administrative obligations. If you belong to one of the following liberal professions, you must charge VAT: architect, tax advisor, accountant, notary, legal interpreter, veterinarian, lawyer, etc.
If you are not sure whether or not you are subject to VAT, check with the business counter or with your accountant. Also check what VAT rate your services and products are subject to.
VAT exemption: special exemption regime for small businesses
Your annual turnover is less than 25,000 €? In this case, you can request a preferential measure in the form of VAT exemption from the VAT office. The advantage is that you save yourself a lot of administration and can charge lower prices. The downside to the exemption is that you can’t get back the VAT you paid. Another big downside is that if your turnover increases, you suddenly have to start charging your customers VAT. In itself, an increase in turnover is positive, but keep in mind that in addition to the mandatory administration of VAT, your prices also increase. Think twice before asking for the exceptional exemption from this tax.