Belgium Raises Small-Business VAT Exemption Threshold From 2027

Belgium has adopted a legislative change increasing the annual turnover threshold applicable to the small-business VAT exemption scheme, known as franchise de taxe in French and btw-vrijstellingsregeling kleine ondernemingen in Dutch.

The change was introduced by the Law of September 23, 2026, which was published in the Belgian Official Journal on October 7, 2026.

Article 26 of the law amends Article 56ter of the Belgian VAT Code, while Article 27 provides that the amendment will enter into force on January 1, 2027.

The existing annual turnover threshold of €25,000 will be increased gradually over several years:

Particularly:

• €26,000 in 2027
• €27,000 in 2028
• €28,000 in 2029
• €29,000 in 2030
• €30,000 from 2031 onward.

The phased approach means that more small Belgian businesses may become eligible for the VAT exemption regime over time, provided that they satisfy the other applicable conditions.

The gradual increase also gives businesses time to adjust their VAT planning and compliance procedures. Rather than introducing an immediate jump to €30,000, the Belgian legislator has chosen a step-by-step approach that allows both businesses and the tax administration to adapt progressively. For small retailers operating close to the existing threshold, this may influence decisions regarding VAT registration status, pricing, invoicing processes and the configuration of accounting or POS systems.

Businesses should nevertheless avoid assuming that the higher threshold applies automatically. Eligibility must still be assessed according to the full set of conditions laid down under Belgian VAT rules, including any exclusions that may apply based on the type of activity performed.

What does the small-business VAT exemption mean?

Under the Belgian small-business VAT exemption scheme, qualifying taxable persons do not generally charge VAT on supplies covered by the regime and are not required to submit standard periodic VAT returns.

However, participation in the regime does not mean that the business ceases to be a VAT taxable person. Certain VAT-related obligations continue to apply, and businesses must still comply with the specific administrative and reporting rules applicable to the exemption scheme.

This distinction is important from a compliance perspective. Businesses using the exemption scheme may benefit from simplified VAT treatment, but they still need to maintain appropriate records, apply the correct VAT status to their transactions and ensure that invoices or receipts are issued in accordance with applicable rules. The exemption mainly affects the collection and reporting of VAT; it does not eliminate all administrative obligations connected with business activity.

The increase therefore primarily affects micro-enterprises and very small businesses whose annual turnover is close to the current €25,000 threshold.

A business with annual turnover exceeding €25,000 but remaining below €26,000, for example, may potentially fall within the exemption regime from 2027 if all other eligibility conditions are fulfilled.

The thresholds will then continue to increase by €1,000 each year until reaching €30,000 in 2031.

Important distinction for GKS fiscalization to understand:

The change should not be interpreted as a general relaxation of Belgium's fiscalization requirements. This is particularly important for businesses operating in the hospitality sector and using Belgium's registered cash register system, or GKS (Geregistreerd Kassasysteem).

The Belgian Federal Public Service Finance states that a small enterprise that is required to use a registered cash register system (GKS) is excluded from the small-business VAT exemption scheme.

Consequently, an HoReCa operator that is subject to the GKS obligation cannot rely on the newly increased VAT turnover threshold as a basis for discontinuing its registered cash register system or otherwise changing its fiscalization setup.

The VAT exemption threshold and the GKS obligation therefore need to be assessed separately.

For POS providers and retailers, this distinction is especially relevant when determining whether a change in VAT status has any effect on the configuration of the cash register, fiscal data processing, receipt issuance or existing GKS compliance processes.

In practice, a change in VAT status may require adjustments in tax codes, receipt layouts, VAT calculations or accounting mappings within the POS environment. However, such operational changes should only be implemented after confirming the actual VAT status of the business and whether any sector-specific fiscalization obligations continue to apply.

The legislative amendment itself also does not introduce changes to the GKS system, GKS 2.0 technical requirements or fiscal receipt rules.

What is the impact on affected businesses?

The main impact will be on small Belgian retailers and other micro-enterprises whose annual turnover is currently close to or slightly above the €25,000 threshold.

Businesses should review their expected annual turnover for 2027 and determine whether the increased threshold could make them eligible for the exemption scheme.

They should also verify all other eligibility requirements before changing their VAT treatment.

For retailers using POS systems, any VAT regime change should also be reflected correctly in their accounting and POS configuration where relevant. Businesses should ensure that VAT treatment, invoices, receipts and accounting records remain aligned with their actual VAT status.

This is particularly relevant for businesses operating multiple sales channels, such as physical stores and online sales, because turnover should be assessed consistently across the business. Retailers should also ensure that any change in VAT treatment is coordinated between accounting, ERP and POS systems so that transactions are processed consistently from the effective date.

Horeca businesses subject to the registered cash register requirement should exercise particular caution. The increase in the small-business threshold does not itself remove the GKS obligation, and such businesses should therefore not modify or deactivate their fiscalization setup solely because their turnover falls below the new threshold.

Belgian small businesses should review their projected turnover for 2027 and subsequent years against the new thresholds and assess whether they meet all conditions for using the small-business VAT exemption scheme.

Businesses should also separately verify whether they remain subject to a GKS obligation, as eligibility for the VAT exemption scheme does not automatically remove fiscalization requirements whereas the first increase, from €25,000 to €26,000, will apply from January 1, 2027.

The source is the Belgian Official Journal, where the Law of September 23, 2026 was published on the October 7th, 2026 - Source

Tara Nedeljković, Team Lead of Legal Consultants at Fiscal Solutions

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