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Mixed taxable persons

Mixed and partial taxable persons do not have a full right of deduction, but can only deduct VAT on their purchases to the extent that those purchases are used for outputs on which VAT is payable.

Mixed taxable persons carry out:

  • transactions on which VAT is payable and
  • transactions that are exempt from VAT on the basis of Article 44 of the Belgian VAT Code.

Mixed taxable persons can determine their right to deduct VAT in two ways (Article 46 of the Belgian VAT Code):

  • Deduction on the basis of the general pro rata figure
  • Deduction on the basis of actual use

Mixed taxable persons

  • Deduction on the basis of the general pro rata figure (Article 46(1) of the Belgian VAT Code)

    Ordinarily, a mixed taxable person uses a general pro rata figure to determine the right of deduction.

    This general pro rata figure is determined as follows:
    (Amount of transactions with right of deduction)/(Amount of all economic transactions (with and without right of deduction))

    The mixed taxable person may only deduct the VAT on the goods and services used for his or her economic activity on a pro rata basis corresponding to this fraction.

  • Deduction on the basis of actual use (Article 46(2) of the Belgian VAT Code)

    In two cases the mixed taxable person may also exercise his or her right of deduction on the basis of the actual use made of the goods and services received (or a portion thereof):

    • The administration grants the taxable person a permit to do so, on request.
    • The administration obliges the taxable person to do so. This will be the case if deduction on the basis of a general pro rata figure would lead to the tax being levied disproportionately.

    If the mixed taxable person exercises his or her right of deduction on the basis of actual use, he or she must distinguish between three types of purchases:

    • Purchases for transactions entirely subject to VAT
      The VAT on these purchases may be deducted in full, unless there is a statutory restriction of deduction (e.g. maximum of 50% deduction for costs relating to passenger cars or no deduction of reception costs, etc.).
       
    • Purchases for transactions entirely exempt from VAT
      The VAT on these purchases may not be deducted.
       
    • Purchases used for both taxed and exempt transactions
      For these purchases the mixed taxable person will have to determine special pro rata figures based on the allocation of the purchases to taxed and exempt activities. The VAT on the purchases may then be deducted proportionately in line with these special pro rata figures (e.g. on the basis of area).
      A special pro rata figure that is determined in the same way as the general pro rata figure can possibly be used, unless the administration explicitly objects to this.