Belgian VAT authorities officially adopt ECJ’s substance over form approach

As you know, in order to exercise the right of deduction a taxable person must, inter alia, hold an invoice mentioning certain mandatory elements (e.g. the date on which the invoice was issued, the VAT identification number of the taxable person and the customer, the full name and address of the taxable person and of the customer, the VAT rate applied or a reference that the transaction is VAT exempt, etc.).

In the past the Belgian VAT authorities sometimes took a rather strict and formalistic position as they refused the right to deduct VAT when the invoice was not completely drawn up in accordance with all statutory required elements (even in cases where many requirements were met).

Change in approach

The Belgian VAT authorities now change their approach in line with recent ECJ judgments such as Barlis (C-516/14) and Senatex (C-518/14), which allowed VAT deduction even in cases where not all formal conditions were met, but where there is sufficient information to ascertain that the substantive conditions to deduct VAT are satisfied.

Hence, as from 12 October 2017 the Belgian VAT authorities confirm that, if the invoice does not include all the mandatory elements, they will take into account the corrected invoice and / or all other additional documents that unambiguously relate to the invoice (e.g. contracts, order forms, tender forms, correspondence, etc.) to assess whether the right to deduct VAT can be granted. Those documents (other than the invoice) should be provided by the taxable person to the VAT authorities before the VAT audit has ended.

It speaks for itself that no VAT deduction will be granted in cases where the taxable person has committed fraud, abuse or knew or should have known that the transaction for which VAT deduction is claimed is part of a fraudulent or abusive scheme.

In case you would have questions in this respect, please do not hesitate to contact the Indirect Tax Team.