What is the VAT exemption scheme in Belgium?
The VAT exemption scheme, officially known as the special VAT exemption scheme for small businesses, allows businesses that meet certain conditions to avoid charging VAT on the sales of goods and services covered by the scheme.
The scheme aims to reduce the tax and administrative obligations of small businesses, particularly self-employed professionals who are starting out.
How does the VAT exemption scheme work?
Unlike a business under the normal VAT scheme, a business using the exemption does not charge VAT on its covered sales. It does not have to file ordinary periodic VAT returns or pay VAT to the Treasury on those transactions.
Take a service priced at €500 as an example:
- Under the VAT exemption scheme: the business invoices €500 without adding VAT.
- Under the normal scheme at 21%: on a taxable amount of €500 excluding VAT, the business charges €105 in VAT, giving a total of €605 including VAT.
This difference in invoicing does not automatically mean that the exempt business earns more. Its price must also cover its costs, including the VAT it cannot recover on purchases.
Small business exemption, other VAT exemptions and a 0% rate: what is the difference?
These three concepts are often confused, even though they involve different tax mechanisms.
| Mechanism | How it works |
|---|---|
| Small business VAT exemption | A scheme for certain small businesses. No VAT is charged on covered transactions, and no VAT can be deducted on the corresponding purchases. |
| Other VAT exemptions | An exemption based on the nature of a transaction or a legal provision, including certain medical or educational activities. |
| 0% VAT rate | A statutory rate applying to specific transactions. It is not the small business exemption scheme. |
| Normal VAT scheme | The business charges VAT on taxable transactions and can deduct VAT on its purchases within the limits set by law. |
The exemption does not therefore mean that you can simply select a 0% rate on an invoice.
For more on these differences, see our guide to VAT schemes in Belgium (in French).
Sources: SPF Finances: Régime de la franchise de taxe · Moniteur belge via EUR-Lex: loi du 21 mars 2024, article 22 introduisant l’article 56decies du Code de la TVA
Who qualifies for the VAT exemption scheme?
The scheme is mainly intended for small businesses carrying out an economic activity subject to VAT whose turnover remains within the statutory limits.
Conditions for the VAT exemption scheme
A business established in Belgium must meet several conditions to qualify:
- Be a taxable person for VAT purposes.
- Stay within the applicable annual turnover threshold.
- Carry out an activity that is not excluded from the scheme.
- Complete the VAT identification or change-of-scheme formalities with the tax authorities.
A business established in another European Union Member State may also qualify for the Belgian exemption under the conditions of the cross-border SME scheme, explained below.
The exemption is open to different legal forms. It is not reserved for sole traders.
A person whose main occupation is self-employment, someone with a self-employed side activity, or a company, including a Belgian private limited company (SRL/BV), may qualify if the conditions are met.
Please note: having a self-employed side activity does not automatically entitle you to the exemption. Eligibility depends in particular on the turnover from the economic activity and the nature of the transactions.
Similarly, employment income earned by someone with a self-employed side activity does not, in itself, count as turnover from that self-employed activity.
Which activities are excluded from the scheme?
Certain businesses are excluded from the exemption for their entire economic activity.
These include:
- VAT groups.
- Businesses that regularly carry out work on immovable property and equivalent transactions, subject to specific statutory exceptions.
- Businesses required to issue receipts from a regulated registered cash register system in the hospitality sector.
- Businesses that regularly make certain supplies of used materials, waste and scrap covered by the legislation.
Other exclusions apply to specific transactions rather than the business as a whole.
Example: someone providing graphic design and web development services may, in principle, consider the exemption if they meet the other conditions. A contractor who regularly carries out work on immovable property, however, must examine the exclusions specific to that sector.
FPS Finance distinguishes exclusions covering the entire activity from those covering only certain transactions. You should therefore check how your actual activity is classified before applying.
Sources: SPF Finances: Régime de la franchise de taxe · Moniteur belge via EUR-Lex: loi du 21 mars 2024, article 22 introduisant l’article 56decies du Code de la TVA · SPF Finances: régime SME de franchise pour les petites entreprises dans l’Union européenne
What is the turnover threshold for VAT exemption?
In 2026, the VAT exemption threshold in Belgium is €25,000 excluding VAT per calendar year.
This amount refers to the turnover counted under the tax rules, not the business owner's net profit.
For example, a business may have €20,000 in turnover and €8,000 in business expenses. It is not the €12,000 profit that is used to assess the threshold.
VAT exemption thresholds from 2026 to 2031
The Act of 23 September 2026, published in the Belgian Official Gazette on 7 October 2026, provides for a gradual increase in the threshold.
| Year | Belgian annual threshold |
|---|---|
| 2026 | €25,000 |
| 2027 | €26,000 |
| 2028 | €27,000 |
| 2029 | €28,000 |
| 2030 | €29,000 |
| 2031 onwards | €30,000 |
The new thresholds take effect from 1 January 2027, as set out in the published Act. They do not retroactively replace the threshold applicable in 2026.
These amounts remain subject to the scheme's other eligibility conditions.
How do you calculate the turnover that counts towards the threshold?
Simply adding up all the money received in your bank account is not necessarily enough. The VAT Code specifies which transactions to include and exclude.
| Transaction | Treatment for the threshold |
|---|---|
| Sales of goods and services carried out in Belgium that would normally be taxable | Generally included |
| Exports and certain intra-Community supplies | Included according to the applicable rules |
| Certain property, financial or insurance transactions that are not incidental | Included according to their classification |
| Sales of the business's capital goods | Excluded |
| Certain transactions exempt under Article 44, including medical or educational activities | Excluded according to the applicable provisions |
| Transactions whose place of supply is abroad | Excluded from annual turnover generated in Belgium |
A business carrying out several activities must consider all the relevant transactions of the same taxable person. It cannot automatically calculate a separate threshold for each activity.
Example: a self-employed professional provides €12,000 in website development services and €15,000 in consultancy services in Belgium during the same year.
If all these transactions count, their relevant turnover reaches €27,000. This exceeds the €25,000 threshold applicable in 2026.
The consequences then depend in particular on the scheme they were already using and the rules for exceeding the threshold.
How do you calculate the threshold if you start during the year?
For a new activity starting during the calendar year, the threshold is reduced in proportion to the number of days remaining.
Official FPS Finance example: starting on 1 July 2026.
The calculation is:
€25,000 × 184 / 365 = €12,602.74, or approximately €12,603.
The threshold for this new business is therefore approximately €12,603 for the period from 1 July to 31 December 2026.
If its projected turnover for that period is €15,000, it cannot opt for the exemption in 2026 on the basis of the prorated threshold.
This calculation is particularly important for businesses starting in the middle or towards the end of the year. Comparing their forecast directly with the full annual threshold could lead to the wrong decision.
Sources: SPF Finances: Régime de la franchise de taxe · Moniteur belge: loi du 23 septembre 2026, relèvement des plafonds de franchise (articles 26 et 27) · Moniteur belge via EUR-Lex: loi du 21 mars 2024, article 22 introduisant l’article 56decies du Code de la TVA
How do you apply for the VAT exemption scheme?
The exemption is not granted simply because a business invoices less than €25,000.
The business owner must complete the administrative steps appropriate to their situation.
Applying for the exemption when starting a business
When setting up a business, the formalities include registration with the Crossroads Bank for Enterprises (CBE), VAT identification and, where applicable, registration with a social insurance fund.
To apply for the exemption from the outset:
- Estimate your turnover for the relevant period of activity.
- Check that your sector and transactions are not excluded.
- Submit your declaration of commencement of activity using form e604A.
- Select the exemption scheme you wish to use.
- Make sure the scheme actually applies before issuing your first invoices.
An accredited business counter, an accountant or a tax adviser can help with the application.
You can access the e604 application through MyMinfin.
Switching from the normal VAT scheme to the exemption
An existing business can also apply to change schemes if it meets the conditions.
This requires an amendment declaration using form e604B.
The change takes effect on the dates set by the tax authorities, including the start of a calendar quarter when the deadlines are met.
For a switch on 1 January 2027, the timetable published by FPS Finance requires an application before 15 December 2026.
Before changing schemes, you must also assess the consequences for any VAT already deducted, particularly where you hold stock or capital goods.
Sources: SPF Finances: Régime de la franchise de taxe · SPF Finances: début, modification et fin d’activité, formulaires e604A, e604B et e604C
How do you invoice, and which obligations apply under the exemption?
The main administrative benefit of the scheme is that ordinary periodic VAT returns are no longer required. Several obligations nevertheless remain.
What wording should appear on an invoice under the VAT exemption scheme?
An exempt business cannot charge VAT on transactions covered by the scheme.
The prescribed French wording for a full invoice is:
“Régime particulier de la franchise de taxe”
Simplified invoice example:
| Item | Amount or information |
|---|---|
| Service | Creation of a professional graphic |
| Invoiced price | €500.00 |
| VAT charged | None |
| Total payable | €500.00 |
| Wording | Régime particulier de la franchise de taxe |
All other mandatory information must also appear, including identification details, the invoice number, dates and a description of the service.
The absence of VAT under the exemption should not be confused with a transaction legally subject to the 0% rate.
Do you need to file a VAT return under the exemption scheme?
Taxable persons using the exemption do not have to file ordinary monthly or quarterly VAT returns.
However, this exemption from filing does not cover every situation.
Certain transactions may require a special VAT return, particularly intra-Community purchases or services for which the Belgian business becomes liable for VAT.
An intra-Community statement may also be required, depending on the goods and services supplied.
Is the annual VAT customer list still compulsory?
Yes. Customer listing requirements have been strengthened for businesses using the exemption.
Since 2026, covering transactions in calendar year 2025 and subsequent years, these businesses must report the total amount of reportable transactions for the previous calendar year through Intervat each year, even when the customer list is nil.
Taxable customers with a Belgian VAT number must be listed individually when the annual amount of reportable transactions exceeds €250 excluding VAT per customer. Customers who exclusively carry out transactions exempt under Article 44 of the VAT Code do not have to be listed individually.
If no customer meets this condition, the business must still report its total turnover, which may be zero, by submitting a nil customer list.
The general annual deadline is 31 March. For exempt businesses required to submit a nil customer list in 2026 for 2025, an exceptional extension was granted until 30 April 2026. This extension does not change the general deadline for subsequent years.
You therefore need to distinguish between two obligations:
- Listing the relevant Belgian taxable customers individually.
- Reporting annual turnover, which is compulsory even if there are no customers to list.
Is structured electronic invoicing compulsory under the exemption?
Yes, for transactions within the scope of Belgium's B2B electronic invoicing requirement.
Since 1 January 2026, Belgian businesses that are taxable persons for VAT purposes must issue and receive structured electronic invoices in their Belgian B2B dealings, subject to the specified exceptions.
This requirement also applies to businesses using the exemption scheme.
Peppol is the default network. However, the parties may agree on another solution that complies with the European standard for electronic invoicing, provided the legal requirements are met.
A simple PDF invoice sent by email is not sufficient for the transactions concerned.
A self-employed professional who works only with private individuals generally does not have to issue structured invoices to those B2C customers. However, they must be able to receive structured electronic invoices from their Belgian business suppliers where the requirement applies.
See our guide to electronic invoicing in Belgium to understand the requirements and how Peppol works.
Sources: Moniteur belge: arrêté royal du 15 décembre 2024, mention de franchise (articles 2 et 16) · SPF Finances: liste annuelle des clients assujettis · e-facture: Champ d’application de la facturation électronique obligatoire · e-facture: Facture électronique et formats structurés · SPF Finances: Régime de la franchise de taxe
What are the advantages and disadvantages of VAT exemption?
The exemption simplifies some administrative tasks, but it is not always the least expensive option.
Main advantages
1. No VAT charged on covered transactions
Private customers may benefit from a more competitive final price when the business maintains an appropriate cost structure.
2. Fewer periodic filing obligations
The self-employed professional does not have to prepare and file the ordinary periodic returns required under the normal VAT scheme.
3. Potentially simpler administration
For a small service business with few transactions and limited expenses, the scheme may reduce the time spent managing VAT.
4. A suitable option for some side activities
People with a self-employed side activity and limited turnover may find the scheme practical, although their social security status does not automatically entitle them to the exemption.
Main disadvantages
1. No deduction of VAT on purchases
This is generally the most significant financial disadvantage.
2. A turnover threshold to monitor
Business growth may cause turnover to exceed the threshold and require a change of scheme.
3. A less obvious commercial advantage in B2B
A business customer who can recover all the VAT often focuses on the price excluding VAT rather than the total invoiced amount.
4. Continuing obligations
Invoicing, bookkeeping, customer listings, intra-Community transactions and electronic invoicing still need to be managed correctly.
Exemption or normal VAT scheme: comparison table
| Criterion | VAT exemption | Normal VAT scheme |
|---|---|---|
| VAT on Belgian sales that would normally be taxable | No, if covered by the exemption | Yes, at the applicable rate |
| VAT on purchases | Not deductible under the exemption scheme | Deductible within the statutory rules and limits |
| Ordinary periodic VAT return | No | Yes |
| Annual customer list | Yes, including turnover reporting | Yes, according to the applicable obligations |
| VAT number | Retained | Retained |
| Belgian B2B electronic invoicing | Compulsory within its scope | Compulsory within its scope |
| Turnover limit | Yes | No comparable threshold for entering the normal scheme |
Worked example: which scheme is more profitable?
Consider a self-employed professional providing services to private customers.
They invoice a service at a final price of €1,000 and incur €400 excluding VAT in directly related purchases, subject to 21% VAT.
Assume that all the relevant transactions and purchases are subject to 21% under the normal scheme, and that all the VAT on those purchases is deductible under that scheme.
| Calculation | VAT exemption | Normal VAT scheme |
|---|---|---|
| Price paid by the customer | €1,000 | €1,000 |
| Revenue excluding VAT on the sale | €1,000 | €826.45 |
| Cost of purchases after any VAT deduction | €484 | €400 |
| Margin after these purchases only | €516 | €426.45 |
In this example, the exemption leaves a margin that is €89.55 higher when the final price for the private customer stays the same.
This difference is not net profit: other expenses, tax, social security contributions and any administrative costs are not included.
The result would differ with greater investment, other VAT rates, different pricing or a customer base made up mainly of businesses.
The right choice therefore depends on the business model, not just turnover.
To compare VAT amounts on purchases or quotations, you can use our free VAT calculator once you have determined the applicable tax treatment.
Sources: SPF Finances: Régime de la franchise de taxe · e-facture: Champ d’application de la facturation électronique obligatoire
What happens if you exceed the VAT exemption threshold?
In 2026, exceeding €25,000 does not necessarily mean leaving the scheme immediately if the business is already using it.
The legislation provides a tolerance limited to 10% of the threshold, or an additional €2,500 in 2026.
This tolerance is not an alternative entry threshold: a business cannot initially apply for the exemption on the assumption that it automatically has a €27,500 allowance.
Exceeding the threshold by no more than 10%
An exempt business whose turnover exceeds €25,000 but does not exceed €27,500 in 2026 may keep the exemption until the end of the calendar year, under the applicable rules.
It must then switch to the normal VAT scheme the following year. The increase in the threshold to €26,000 on 1 January 2027 does not cancel the fact that the 2026 threshold was exceeded: Article 56decies of the VAT Code maintains the exclusion from the scheme for the following year.
Example: a self-employed professional has turnover of €26,750 in 2026.
This exceeds the threshold by €1,750, or 7% of the €25,000 limit.
They may keep the exemption for the rest of 2026 as long as they do not exceed the maximum permitted tolerance. Under the transition rules published by FPS Finance, they switch to the normal scheme on 1 January 2027.
Exceeding the threshold by more than 10%
If turnover exceeds €27,500 in 2026, the normal VAT scheme applies from the transaction that causes this limit to be exceeded.
Example: the self-employed professional has already generated €26,800 in turnover and invoices a further service worth €1,500.
Their turnover reaches €28,300.
This new transaction takes turnover above €27,500. It is therefore subject to the normal VAT scheme, with the corresponding invoicing and filing obligations.
It is not sufficient to apply VAT only to the €800 above the tolerance limit.
| Turnover in 2026 | Consequence for a business using the exemption |
|---|---|
| €24,000 | Within the threshold |
| €26,750 | Threshold exceeded by 7%: exemption retained for 2026, normal scheme from 2027 |
| €28,300 | Threshold exceeded by more than 10%: normal scheme from the transaction that causes the excess |
It is essential to track invoiced amounts, the transactions included in the calculation and their timing.
Can you return to the exemption after changing schemes?
Yes, but the conditions for returning depend on why you left.
If you leave voluntarily, you can generally return to the exemption no earlier than 1 January of the second year following the change of scheme, provided all the conditions are met again.
For example, a business that voluntarily leaves the exemption in July 2026 cannot normally return before 1 January 2028.
If the threshold is exceeded in 2026, the business leaves either from the transaction that exceeds the 10% tolerance or on 1 January 2027 if the excess stays within that tolerance. In both cases, it is under the normal VAT scheme throughout 2027. A return to the exemption may be considered no earlier than 1 January 2028, if the eligibility conditions are met again, including those relating to the previous year's turnover.
Changes of scheme may also trigger adjustments to VAT previously deducted or VAT that could become deductible, depending on the nature of the goods and the applicable rules.
Check these points with an accountant before making the transition.
Sources: SPF Finances: Régime de la franchise de taxe · Moniteur belge via EUR-Lex: loi du 21 mars 2024, article 22 introduisant l’article 56decies du Code de la TVA · Moniteur belge: loi du 23 septembre 2026, relèvement des plafonds de franchise (articles 26 et 27)
VAT exemption and intra-Community transactions: how does the SME scheme work?
An exemption granted in Belgium does not automatically apply to all sales within the European Union.
International transactions require a specific assessment of the place of taxation, the customer's status and the filing obligations.
The European SME scheme since 2025
Since 1 January 2025, an EU mechanism has allowed small businesses established in one Member State to benefit from an exemption in other Member States, subject to conditions.
This mechanism is called the SME scheme (Small and Medium-sized Enterprises).
A business established in Belgium can apply to use the SME scheme in another EU country if:
- Its annual turnover throughout the European Union does not exceed €100,000.
- Its turnover in the country concerned stays within that country's national threshold.
- Its transactions are not excluded from the scheme.
- It meets the prescribed notification and reporting obligations.
Applications are made through Intervat, with prior notification and quarterly reports specific to the SME scheme.
The EU-wide €100,000 threshold should not be confused with the Belgian €25,000 threshold applicable in 2026.
The €85,000 amount sometimes mentioned in European discussions does not replace the Belgian national threshold.
Buying from or selling to a foreign business
A self-employed professional using the exemption who buys software from a foreign business, receives a service from an EU supplier or invoices a service to a business in another Member State may be subject to specific rules.
Depending on the nature of the transaction, a special return and payment of VAT may be required, even when no VAT is charged on the professional's Belgian sales.
Intra-Community sales should not automatically be treated as ordinary Belgian sales under the exemption either.
For EU transactions, see our guide to intra-Community VAT (in French).
Sources: SPF Finances: régime SME de franchise pour les petites entreprises dans l’Union européenne · Moniteur belge via EUR-Lex: loi du 21 mars 2024, article 22 introduisant l’article 56decies du Code de la TVA
VAT exemption: key points before making your choice
The Belgian VAT exemption scheme may be a useful option for a self-employed professional or small business seeking simpler administration.
Before choosing it, check which turnover counts, the nature of your activity, the VAT you pay on purchases, your customer profile and your business's growth prospects.
In 2026, the threshold remains €25,000 excluding VAT, subject to the applicable prorating and excess rules. The gradual increase in thresholds from 2027 removes neither the scheme's exclusions nor its administrative obligations.
The exemption is therefore a tax and business decision, rather than simply a way to invoice without VAT.
To check amounts excluding and including VAT in your comparisons, use our Belgian VAT calculator. To confirm your eligibility, refer to the legislation and FPS Finance.
Sources: SPF Finances: Régime de la franchise de taxe · Moniteur belge: loi du 23 septembre 2026, relèvement des plafonds de franchise (articles 26 et 27)