VAT exemption scheme for small businesses

Since 1 January 2025, persons liable to pay tax established in Belgium can benefit from tax exemption in one or several other Member States thanks to the SME scheme. This measure will soon be implemented.

VAT exemption scheme for small businesses

  • What exactly is the VAT exemption scheme?

    You are exempt from most VAT obligations. Specifically, you do not have to:

    • submit periodic returns,
    • charge VAT to your customers,
    • pay VAT to the Treasury.

    On the other hand:

    • you must submit a declaration of commencement, modification or cessation of activity (e604 A, B or C),
    • you must submit a declaration of intra-Community supplies for the intra-Community deliveries and services which you provided,
    • you remain subject to VAT and must therefore have a VAT identification number,
    • you do have certain obligations with regard to invoicing, accounting, etc.,
    • you may not deduct VAT,
    • you must submit a list of your customers, except when you have not carried out any transaction that needs to be included in the customer list,
    • each year, by 31 March at the latest, you must provide the total amount of your transactions carried out the former year in Belgium. If no transaction was carried out, please indicate “0”.  For the first time, this information must be communicated no later than 31 March 2026, as regards 2025. The administration will explain the exact procedure for communicating this data on the website of the FPS Finance.
    • you must submit a special VAT return in cases of intra-Community acquisitions or services for which you are liable for VAT.

  • For whom is the VAT exemption scheme intended?

    You are eligible for the VAT exemption scheme if your business’s annual turnover does not exceed EUR 25 000 (excluding VAT). It does not matter what legal form your business takes (natural person, company, etc.).

    Please note! VAT units and certain sectors (construction work, catering, the supply of old materials) are excluded from this scheme. Certain transactions are also excluded from this scheme (but the business concerned can benefit from this scheme for all its other transactions).

  • When and how do you opt for the exemption system?

    In 2025, you can opt for the exemption system via the e604 application:

    • before 15 March 2025, if you wish to apply this system as from 1 April 2025;
    • before 15 June 2025, if you wish to apply this system as from 1 July 2025;
    • before 15 September 2025, if you wish to apply this system as from 1 October 2025;
    • before 15 December 2025, if you wish to apply this system as from 1 January 2026;

    You will get access to the application e604 in MyMinfin under the tab “Liens utiles/useful links” (TVA  : démarrer, modifier ou cesser son activité (appli e604) / VAT: starting, changing or stopping your activity (application e604).

  • Turnover threshold exceeded by 10 % maximum in 2024 - Tolerance

    If your turnover for the current calendar year exceeds the threshold of 25,000 Euro by 10 % at the maximum, you will lose the benefit of the exemption system for the following calendar year.

    For instance: In 2025, your transactions exceed the threshold of 25,000 Euro by 7 % (that is to say, 26,750 Euro). You can still apply the exemption system in 2025 as long as the total amount of your transactions does not exceed the maximum threshold of 10 % (that is to say, 27,500 Euro at the maximum). On 1 January 2026, you will be subject to the normal system.

    Tolerance 2024-2025

    If you exceed the maximum threshold of 10 % in 2024, an administrative tolerance allows you to still apply the exemption system in 2025.

    For instance: In 2024, your turnover exceed the threshold by 8 %, amounting to 27,000 Euro. You can still apply the exemption system in 2024 and 2025.

    In 2025, if you exceed the threshold by a maximum of 10 %, you can still apply the exemption system in 2025 but will be subject to the normal system as from 1 January 2026.

    For instance: If your threshold reaches the amount of 26,750 Euro in 2025, you can still apply the exemption system in 2025, but as from 1 January 2026 you will be subject to the normal system.

    If you exceed the threshold by more than 10 % in 2025, you will be subject to the normal system in 2025 as from the transaction that caused the threshold to be exceeded. 

  • How do I re-enter the VAT exemption scheme after changing my VAT scheme?

    When you leave the VAT exemption scheme, you can only return to it from 1 January of the second year following your change of scheme (if all the conditions for applying it are met). A whole calendar year must elapse - waiting period - before you can apply the exemption system.

    Example

    As an exempted taxable person, you have voluntarily changed your VAT scheme to submit quarterly returns from 1 July 2025. You will only be able to switch back to the VAT exemption scheme (if all conditions are met) from 1 January 2027.

    But, if you have to switch to the normal system because your threshold has been exceeded:

    • by a maximum of 10 % in 2025: you can still apply the exemption system in 2025, but you will have to switch to the normal system in 2026. You can only apply the exemption system as from 1 January 2027.
    • by more than 10 % in 2025: you must switch to the normal system in 2025 as soon as the transaction that caused the threshold to be exceeded occurred. In 2026, you will also be subject to the normal system.  You can only apply the exemption system as from 1 January 2027.

  • Where can I find more information?

    The brochure “9 questions about the VAT exemption scheme for small businesses" (available in Dutch, French and German) explains in detail the application of this system and the consequences of a change of tax system.