Mixed and partial taxpayers: more info on the formalities to be fulfilled in 2024!

As from 01/01/2024, new obligations were introduced for certain mixed taxable persons (those applying the general pro rata method) and for partial taxable persons.

Mixed taxable persons are persons who are carrying out both a) transactions that allow for VAT deduction and b) transactions that are exempt from VAT without VAT credit.

Partial taxable persons are taxable persons that also perform activities outside the scope of VAT.

By some recent changes to Royal Decree nr. 3, further detailed rules regarding the required notifications and communications of data were defined. Please find below an overview of the deadlines of the notifications and communications that mixed and partial taxable persons should take into account in 2024. Actions will already have to be taken in the first months of this new year!

A. Mixed taxable persons applying the real use method

1. Advance electronic notification

Since January 1^st, 2023 mixed taxable persons are required to submit an electronic notification in order to opt for the deduction of VAT according to the real use method.

• Existing mixed taxable persons that were already applying the real use method on December 31^st, 2022 had to notify by June 30^th, 2023.

• Existing mixed taxable persons applying the general pro rata can only shift to the real use method as from the 1^st of January of each year. For those that want to shift as from January 1^st 2024, this notification has to be done by January 31^st, 2024 (monthly filers) or by March 31^st, 2024 (quarterly filers).

• New mixed taxable persons (following a start or change of activities) should notify before the end of the first reporting period (month or quarter) in which they became a mixed taxable person. Note that this deadline has been shortened compared to the previous rules! For example, when starting as from April 10^th, 2024 as a mixed taxable person required to file quarterly VAT returns, the notification has to be done by June 30^th, 2024. The real use method then starts on April 10^th, 2024.

The advance electronic notification is made via the declaration e604A (start of VAT activity) or e604B (change in VAT activity).

2. Yearly communication of data

Those mixed taxable persons are also required to provide certain information on how to exercise the right to deduct VAT in the VAT return, which should be filed electronically via the INTERVAT application:

• For quarterly filers: at the latest in the VAT return of the first quarter of the year (for 2024 this means by April 22^nd, 2024) or in the VAT return of the quarter of start or change of activities (for new mixed taxable persons).
• For monthly filers: in one of the three first VAT returns of the year (for 2024 this means at the latest in the March VAT return which is due by April 22^nd, 2024) or in the VAT return of the first or second month following the start or change of activities (for new mixed taxable persons).

Please note that for mixed taxable persons that already did the advance electronic notification in 2023, the communication of data is also to be done for the first time in 2024. The same deadlines apply, except for the monthly filers already applying the real use method on December 31^st, 2022. They can communicate the data in the May 2024 VAT return (to be filed on June 20^th, 2024).
 

B. Mixed taxable persons applying the general pro rata

1. Advance electronic notification

As from January 1^st, 2024 mixed taxable persons applying the general pro rata method are also required to submit an advance electronic notification.

• Existing mixed taxable persons that were already applying the general pro rata method on December 31^st, 2023 have to notify by June 30^th, 2024.

• Existing mixed taxable persons applying the real use method can only shift to the general pro rata as from the 1^st of January of each year. Please note that the real use method should be applied at least until 31 December of the third year following the date of effect of the real use notification. For those that wanted to (and could) shift as from January 1^st, 2024, this general pro rata notification had to be done by December 31^st, 2023.

• New mixed taxable persons (following a start or change of activities) should notify before the end of the first reporting period (month or quarter) in which they became a mixed taxable person. For example, when starting as from May 5^th, 2024 as a mixed taxable person required to file monthly VAT returns, the notification has to be done by May 31^st, 2024. The general pro rata method then starts on May 5^th, 2024.

The advance electronic notification is made via the declaration e604A (start of VAT activity) or e604B (change in VAT activity).

2. Yearly communication of data

Those mixed taxable persons are also required to provide their preliminary and final general pro rata in the VAT return, which should be filed electronically via the INTERVAT application:

• For quarterly filers: at the latest in the VAT return of the first quarter of the year (for 2024 this means by April 22^nd, 2024) or in the VAT return of the quarter of start or change of activities (for new mixed taxable persons).

• For monthly filers: in one of the three first VAT returns of the year (for 2024 this means at the latest in March VAT return which is due by April 22^nd, 2024) or in the VAT return of the first or second month following the start or change of activities (for new mixed taxable persons).
   

C. Partial taxable persons

Partial taxable persons are taxable persons that also perform activities outside the scope of VAT. Following article 45 of the VAT code, they will always apply the principle of the real use method for their VAT deduction. Since this is mandatory, they are not required to make the advance notification.

However, for the first time, they will be required to communicate data to the VAT authorities. As from January 1^st, 2024 they are required to communicate the same type of data as the mixed taxable persons applying the real use method.

This should be filed electronically via the INTERVAT application on a yearly basis:

• For quarterly filers: at the latest in the VAT return of the first quarter of the year (for 2024 this means by April 22^nd, 2024) or in the VAT return of the quarter of start or change of activities (for new partial taxable persons)

• For monthly filers: in one of the three first VAT returns of the year (for 2024 this means at the latest in the March VAT return which is due by April 22^nd, 2024) or in the VAT return of the first or second month following the start or change of activities (for new partial taxable persons)
   

Call for action

Each mixed or partial taxable person will have to check which formalities are to be fulfilled by which date. Furthermore, since the VAT authorities announced to perform more audits, it is very important to check the VAT deduction data before filing those and to prepare for questions. Also, it might be interesting for some mixed taxable persons to change the VAT deduction method or to revisit the calculation of special pro rata. Please do not hesitate to reach out to us if we can provide support or if you should have any questions.