Guideline on the refund of historic VAT for optional leasing with VAT

The historic VAT is the VAT that became due before 1 January 2019, but that could not yet be deducted prior to this date. According to the communication, this VAT may now be deducted in the tax return relating to the first period of 2019 (to be submitted before 20 February 2019 for anyone filing monthly returns and before 20 April 2019 for anyone filing quarterly returns).

More specifically, this concerns the VAT levied on:

• the works on immovable property (actual construction work) relating to the buildings or parts of buildings that can benefit from the new regime, to the extent that these activities contribute to the construction of these buildings or parts thereof and for which the VAT became due (at the earliest) from 1 October 2018.

• the intellectual services that relate to the aforementioned buildings or parts thereof, such as the services of architects and surveyors, security experts and the preliminary studies. Also if the VAT relating to this became due before 1 October 2018

• the work relating to the prior demolition of a building, with the purpose of subsequently erecting a building as described under the first point. Also if the VAT relating to this became due before 1 October 2018.

• work relating to the ground (cone penetration work, remediation work, earthworks, underground or surface stabilisation work, etc.) on which a building, as described under the first point, will be constructed. Also if the VAT relating to this became due before 1 October 2018

The specific process of exercising the right of deduction of the historic VAT is as follows:

The amount of the historic deductible VAT is offset against the amount of the payable VAT, as in section 71 of the periodic tax in line with the usual rules. If after offsetting this amount, another amount of this historic VAT qualifies for deduction, this credit will be transferred to the next tax periods and so on, until this amount has been fully allocated.

The amount of VAT that cannot be offset in the first eleven monthly tax returns or the first three quarterly tax returns in the year 2019, can be included in the monthly tax return of December 2019 or of the fourth quarter of 2019. This will otherwise not be transferred. 

In order to deduct historic VAT, the taxpayer must provide his authorised VAT supervising office with an inventory of the goods and services in question in respect of which he wishes to deduct the VAT.

If you have any questions on how to deduct the historic VAT, please do not hesitate to contact one of our specialists at contact@vdl.be.