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Tolerances for the change to the Medical VAT Exemptions from January 1, 2022

TOLERANCES FOR THE CHANGE TO THE MEDICAL VAT EXEMPTIONS FROM JANUARY 1, 2022

The scope of the VAT exemption for services provided by the (para)medical professions, hospital nursing and medical care will change from 1 January 2022. A detailed explanation of this change will follow. 

In order to take into account the concerns expressed by the industry, we foresee tolerances for:

A. The applicable VAT regime

The following acts may remain subject to the scheme as it applied until 31 December 2021:

  • the interventions or treatments performed by medical professionals and hospitals that have been agreed with the patient by 31 December 2021 at the latest to be performed on a specific date (provided that the treatment or the intervention is actually performed or completed by 30 June 2022 at the latest)
  • the service performances (e.g. surveys) that have already been performed no later than 31 December 2021 (taxable event) but for which a cause of claimability arises after that date.

If a fee relates partly to services rendered materially before 31 December 2021 at the latest and partly to services rendered materially after that date, the fees remain on the services materially performed before 1 January 2022 for which VAT applies under the statutory rules had not yet become due and payable no later than 31 December 2021, follow the scheme that applied until 31 December 2021. This is provided that a formal, detailed cost statement is issued and the price is clearly determinable and can be attributed to the materially provided services before 1 January 2022. This cost statement must be issued to the co-contracting party on 28 February 2022 at the latest.

B. The VAT identification (Forms e604A and e604B)

Taxable persons who must be identified for VAT purposes as a result of these changes ((mixed) taxable person submitting periodic VAT returns, taxable person subject to the exemption scheme for small businesses,…) can have their company number activated by submitting the form e604A via a recognized business counter or via the e604 application .

The company number can be activated as a VAT identification number with effect date on January 1, 2022, provided that the form is submitted no later than January 31, 2022 .

Taxable persons who were already identified for VAT purposes, but as a result of these changes must have their VAT identification changed (e.g. some of the activities are no longer exempt, the activities are now wholly or partially exempt, the transition to another tax scheme,…) can do this by submitting form e604B via a recognized business counter or via the application e604 .

The VAT identification can be changed with effect date on January 1, 2022, provided that the form is submitted no later than January 31, 2022 .

C. The submission of the first periodic VAT returns

In order to give taxable persons who, as a result of the changes to this VAT exemption, have to submit periodic VAT returns for the first time, the time to adapt to this, the following tolerances are provided:

  • A submitter of monthly returns can include the transactions of January, February and March 2022 in the April 2022 return (along with the transactions of April 2022) that must be filed by 20 May 2022.

    This tolerance does require that a nil return is submitted for the months of January, February and March 2022, no later than 20 February, 20 March and 20 April 2022.

  • A submitter of quarterly declarations can only include the transactions of the first quarter of 2022 in the declaration of the second quarter of 2022 (together with the transactions of the second quarter of 2022) that must be submitted by July 20, 2022 at the latest.

    However, this tolerance requires that a nil return is submitted for the first quarter of 2022, no later than 20 April 2022.

This is an optional tolerance so that taxable persons who have previously been adapted to the VAT legislation can choose not to follow this tolerance.

In addition, in the case of a monthly declarant, transactions of January 2022 and February 2022 are allowed to be included in the February 2022 return to be submitted by 20 March 2022 (submission of a nil return for the month of January 2022), but then the normal rules must be respected for subsequent declarations. In that sense, the transactions of January 2022, February 2022 and March 2022 may also be included in the return of March 2022 that must be submitted no later than April 20, 2022 (with submission of nil returns for the months of January and February 2022), but must subsequently for the following declarations the normal rules will be applied.

D. The Revisions

Taxable persons who currently mainly carry out taxable transactions and who will in future carry out largely exempt transactions (which will therefore not confer any right to deduct) must review the deductions made in previous years (this is the case, for example, for podiatrists). This can have a major impact depending on the size of the investments made. In the context of amendments to the provisions of Articles 44, § 1 and § 2, 1°, a) of the VAT Code, the administration confirms that the revision can be carried out annually, even if it turns out that, at the time that the VAT regime of the taxable person concerned changes, the person concerned will only carry out transactions that do not confer a right to deduct. 

Source financien.belgium

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