VAT registration: how do you activate your number?

The principle

It all starts with the CBE number. Every business receives it when it enrols in the Crossroads Bank for Enterprises. That number alone does not let you charge the tax. Your VAT registration turns it into a full identification number: the letters BE, followed by the ten digits of the CBE number.

Until that step happens, you cannot charge the tax or recover it on your purchases. The FPS Finance therefore expects your declaration before the activity starts. Waiting for the first sale leads to delays and corrections.

Who needs VAT registration?

The rule covers any economic activity carried out independently. In practice, it applies to the following profiles.

• Self-employed people, whether full-time or alongside a job.
• Trading companies, for example an SRL or an SA.
• Non-profit associations that sell goods or services on a regular basis.
• Foreign businesses that carry out taxable transactions in Belgium.

Some activities remain exempt, such as most healthcare. In that case, standard identification is not always necessary. An adviser checks your situation before any needless VAT registration.

The steps of your VAT registration

Plan for five steps, in this order.

The business counter charges a fee for this service, while filing directly with the tax authority costs nothing. The authority may also invite you to an interview. It then wants to understand the reality of your project, especially for a recently formed company.

The timing depends on the channel and on the quality of the file. A complete file often goes through within a few days. An interview, however, can add several weeks to your VAT registration.

The documents to prepare

Gather these items before you fill in the form.

• A copy of the identity card of the manager or self-employed person.
• The articles of association, if you operate through a company.
• Proof of the registered office: lease, domiciliation contract or title deed.
• A precise description of the activity.
• An estimate of turnover for the first year.
• The number of the business bank account.

A vague description often slows the file down. Write "custom software development for SMEs" rather than "IT services". That precision avoids a series of questions after your VAT registration.

Standard scheme or exemption?

The form also asks you to pick a scheme. Two options matter for most founders.

The standard scheme

You charge the tax to your customers. In return, you recover the tax you pay on business purchases. You also file a periodic return, either monthly or quarterly. Monthly filing becomes compulsory above 2,500,000 euros of annual turnover.

The small business exemption

This scheme applies to annual turnover of up to 25,000 euros, excluding tax. You do not charge the tax, but you cannot recover it either. Your invoices then mention the special exemption scheme for small businesses. You do not file periodic returns, but the annual listing of taxable customers still applies.

Take an example. A graphic designer expects 18,000 euros of sales, mostly to private individuals. The exemption keeps her prices unchanged. By contrast, a carpenter who buys 40,000 euros of machinery usually prefers the standard scheme. He thus recovers the tax on that investment.

A flat-rate scheme also exists for a few sectors, such as some bakeries or butchers. It remains rare. Decide on your scheme at the time of your VAT registration, since a later change requires a new filing.

The rates to know

After your VAT registration, four rate levels apply in Belgium.

• The standard rate of 21%, for most goods and services.
• The 12% rate, notably for restaurant meals excluding drinks and for social housing.
• The 6% rate, among others for food, books and medicines.
• Exemptions, for example for exports and intra-Community supplies.

Mistakes that delay your VAT registration

• Charging the tax before the number is confirmed.
• Declaring a registered office without a valid lease or domiciliation contract.
• Describing the activity in overly general terms.
• Forgetting the filing when starting a side business.
• Staying in the exemption scheme after crossing the threshold during the year.

Each of these mistakes leads to extra correspondence with the tax authority. Some also expose you to corrections and fines.

After activation: your first obligations

Once you hold the number, the tax calendar starts.

• Show your number on every invoice.
• File each return by the 20th of the month following the period.
• Submit the annual listing of taxable customers before 31 March.
• Report your intra-Community transactions if you sell to European customers.
• Issue structured invoices to Belgian business customers, following the rules on mandatory electronic invoicing.

Think about your cash flow too. The tax you collect does not belong to you: it goes to the FPS Finance at each due date. A financial forecast includes those outflows from the first quarter.

In short

Your VAT registration comes before the first invoice. It requires enrolment with the CBE, a complete form 604A and a well-considered choice of scheme. Prepare your documents and describe the activity precisely. Finally, check the current rules on the FPS Finance website. Juristelo then helps you build the tax into your financial plan.