Belgium delays VAT rate changes.

The Belgian Ministry of Finance had previously announced plans to combine the existing 6% and 12% reduced VAT rates into a new 9% rate. The standard VAT rate of 21% would be unchanged. The implementation date was expected to be January 2024; however, some changes have occurred, especially in regards to the timetable of these changes.

The consolidation of VAT rates would effectively mean a net tax rise since there are many more supplies at the 6% rate, including:

• entrance to cultural events, amusement parks, and similar
• books
• buildings
• certain foodstuffs
• hotel accommodation
• rail, road, and passenger transport
• water supplies.

However, the collapse of tax reform talks means setting aside for now the consolidation of 6% and 12% reduced rates to the new 9% VAT rate in Belgium. The failure to agree on the tax plan means any fresh attempt to consolidate the rates will not come until after the 2024 summer elections in this country.

The postponement of the VAT rate consolidation may provide some relief for businesses that were concerned about the impact of higher VAT rates on their customers and cash flow due to this upcoming change. The Belgian government will have to resume the tax reform negotiations after the elections, but until then, the current VAT rates and rules will remain in effect.