‘Super Nota’ Tax reform proposal to reignites consolidation of 6% and 12% reduced VAT rates to new 9% rate
Flemish politician and chief negotiator on forming the next Belgian Federal Government , Bart De Wever, has put together a comprehensive tax plan to be at the centre of any eventual new coalition. It is further rumoured that there is a VAT rise on basics.
In July 2022, the Belgian Finance Ministry had 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. However, these plans ended when tax reform talking ended in July 2023. This also delayed the scheduled July 2024 Belgian e-invoicing launch to January 2026..
The reforms had envisaged a major shift of the tax burden away from income to wealth. But opposition parties doubted the government’s estimates on the like new revenues and the risk of a shortfall.
Read more in our Belgian VAT guide.
The consolidation 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 passenger transport
- Water supplies
But fruit and vegetables would drop to zero percent.
The proposals are seen as part of a raft to tax reductions and simplifications, now stalled, including:
- Rise in personal income tax thresholds
- Cut in the corporate income tax rate on small businesses
- Introducing the global minimum tax on multinationals as part of the Pillar 2 OECD tax reforms
The EU introduced new reduced EU VAT rate setting freedoms on 6th April 2022 which allows member states to use a reduced VAT rate below 5% for the first time on a controlled ranges of goods and services. Plus, extended the categories of supplies eligible for the other two reduced rates permitted below their standard rate.
