The abbreviation "VAT" stands for "Value Added Tax": the tax on products or services that an end customer pays to a business on top of the actual price of the product or service. This means that VAT-registered business owners who sell the products or services must in turn transfer this amount to the government later on.
So, when you file your VAT return, it's not about how much money entrepreneurs have to pay themselves, but rather about the VAT amounts paid by their customers that they have temporarily collected for them.
The VAT rate that each entrepreneur charges depends on their type of business and the type of product or service that is being traded. The basic rate in Belgium is 21%, but more favorable rates apply to certain categories, such as 12% for social housing or 6% for essential products such as food and medicine. Companies with an annual turnover of less than 25,000 euros can even opt for a VAT exemption. In that case, you don’t have to pass on any money to the government, but of course you’re not allowed to pass on VAT to your customers either. You may also not deduct the VAT that you yourself pay to suppliers.
An example: suppose that the basic rate of a freelancer is 400 euros per day. Then the customer who hires him for a day will pay 484 euros (in the case of 21%) and the freelancer must therefore set aside those 84 euros to pass on to the state later.
"}},{"componentType":"highlight","title":"Even accountants can use financial advice sometimes","richBody":{"value":"From Rise & Shine webinars with fiscal and economic updates to credit solutions: discover the many benefits of ING Accountis here
"}},{"componentType":"sectionTitle","title":"What does a VAT declaration contain?"},{"componentType":"paragraph","richBody":{"value":"Filing your VAT return correctly and on time is important to avoid potential fines. Many entrepreneurs therefore rely on the expertise of an accountant to keep an eye on the necessary deadlines, avoid errors, and make sure all necessary information is included in their declaration.
But whether you declare your VAT yourself or not, the first step is always to collect all the information below that must be included in every VAT declaration:
There are also some additional reports that are part of your VAT declaration:
Both the periodic VAT declaration and the annual customer listing must be submitted electronically via Intervat, an online application of the VAT administration. Only in exceptional cases can you request permission to file a declaration on paper via a cover letter to a VAT supervising office.
In most cases, the return must be submitted monthly. The entrepreneur then submits his declaration at the latest on the 20th of the month following the month in which the transactions took place.
Is the annual turnover of your company no more than 2.5 million euros excluding VAT? Or no more than 250,000 euros excluding VAT for the supply of energy products, electronic devices, and land vehicles? Then you can choose to declare your VAT quarterly, except if you are required to submit monthly intra-community declarations.
"}},{"componentType":"highlight","title":"A smooth start as a self-employed professional?","richBody":{"value":"Open a professional current account now and receive your ING Starters Package, a complete package for all your banking needs as an entrepreneur, including Accountable!
"}}]}}}