In Belgium, since 1 January 2022, a new mandatory mention must appear on invoices to justify the application of the reduced 6% VAT rate on renovation work carried out in residential buildings.
The required mention is as follows: "VAT rate: In the absence of a written objection within one month of receipt of the invoice, the customer is presumed to acknowledge that (1) the work is carried out on a residential building whose first occupation took place during a calendar year at least ten years prior to the date of the first invoice relating to said work, (2) that after completion of the work, the dwelling is used either exclusively or primarily as a private residence, and (3) that the work is supplied and invoiced to a final consumer. If at least one of these conditions is not met, the standard VAT rate of 21% will apply, and the customer will bear responsibility for the payment of tax, interest and penalties due."
This new mandatory mention in Belgium aims to simplify the administrative procedure for homeowners carrying out renovation work on their property. Homeowners no longer need to complete a VAT certificate to benefit from the reduced 6% VAT rate. They simply need to verify that the mention appears on the invoice and not contest it in writing within one month of receiving the invoice.
For contractors, this mention is also beneficial, as they can immediately invoice at 6% without waiting for the homeowner to complete a VAT certificate. However, they must ensure that the work meets the three conditions stated in the mention to qualify for the reduced 6% VAT rate.
It is important to note that if any of the conditions is not met, the standard 21% VAT rate will apply and the customer will be responsible for paying the tax, interest and penalties due. It is therefore crucial that homeowners verify that the work meets all conditions to benefit from the reduced 6% VAT rate.
When does the reduced 6% rate apply?
The reduced 6% VAT rate in Belgium does not apply automatically to all construction work. It is strictly reserved for renovation, transformation, improvement, repair and maintenance work carried out on residential buildings that meet specific criteria. Understanding these criteria is essential for every contractor in the construction sector and for every homeowner wishing to benefit from the reduced rate.
The 10-year rule: building age
The first fundamental condition concerns the age of the building. To qualify for the 6% rate, the building must have been first occupied during a calendar year at least ten years prior to the date of the first invoice for the work. In practical terms, if you issue an invoice in 2026, the building must have been first occupied no later than 2016.
This 10-year rule is calculated from the year of first occupation of the building, not from the construction date or the building permit date. It is the homeowner's responsibility to be able to prove this date of first occupation, for example through the land registry, a deed of sale, or a connection to public utilities.
Residential use of the building
The second condition relates to the use of the building after the work is completed. The dwelling must be used either exclusively or primarily as a private residence. This means that work carried out on a building used purely for commercial or industrial purposes cannot benefit from the 6% rate. However, if a building has mixed use (for example, a shop on the ground floor and a residence on the upper floors), the 6% rate may apply to all renovation work, including work carried out in the professional part, provided that the private residential use represents more than 50% of the building's total use after the work is completed. If the professional part exceeds 50%, the 21% rate applies to all work.
Invoicing to a final consumer
The third condition requires that the work is supplied and invoiced to a final consumer. In practice, this means the client commissioning the work must be the end user of the dwelling (owner, tenant, usufructuary, etc.) who uses the building for private residential purposes. Property developers, for example, cannot benefit from this reduced rate for buildings intended for resale.
What types of work are covered by the 6% rate?
The reduced 6% rate covers a wide range of renovation and maintenance work. Here are the main categories:
- Transformation and renovation work: partial demolition and reconstruction, extensions (within certain limits), interior redesign, modification of room layouts.
- Improvement work: installation or replacement of central heating, thermal insulation (roof, walls, floors), installation of double or triple glazing, installation of solar panels or heat pumps.
- Repair work: roof repairs, gutter replacement, facade restoration, plumbing or electrical repairs.
- Maintenance work: interior and exterior painting, facade cleaning, boiler maintenance, drain unblocking.
- Installation work: fitting of built-in kitchens (fixed to the building), bathroom installation, laying floor coverings, installation of alarm systems or home automation systems fixed to the building.
However, certain types of work are excluded from the reduced rate. Construction of a new building is always subject to the 21% rate. Similarly, the 21% rate applies to work on buildings that are not primarily used as a private residence.
Differences between the 6% and 21% VAT rates
The distinction between the reduced 6% rate and the standard 21% rate has a considerable financial impact for homeowners. On a renovation project costing EUR 50,000 excluding VAT, the difference amounts to EUR 7,500 (EUR 3,000 VAT at 6% versus EUR 10,500 at 21%). This substantial saving explains why it is so important to properly understand and comply with the conditions of application.
The 21% rate applies in the following situations:
- Construction of a new building.
- Work on a building less than 10 years old.
- Work on a building used exclusively for professional or commercial purposes.
- Supply of movable goods not incorporated into the building (for example, freestanding household appliances).
- Work invoiced to a company acting within the scope of its professional activity.
- Absence of the mandatory mention on the invoice.
It is therefore in the interest of all parties to carefully verify each condition before applying the reduced rate.
The exact text of the mandatory mention
Since 1 January 2022, the former VAT certificate (the form that the client had to sign and hand over to the contractor) has been replaced by a mandatory mention to be included directly on the invoice. This mention transfers the responsibility for verifying the conditions to the client. Here is the full text of this mention:
"VAT rate: In the absence of a written objection within one month of receipt of the invoice, the customer is presumed to acknowledge that (1) the work is carried out on a residential building whose first occupation took place during a calendar year at least ten years prior to the date of the first invoice relating to said work, (2) that after completion of the work, the dwelling is used either exclusively or primarily as a private residence, and (3) that the work is supplied and invoiced to a final consumer. If at least one of these conditions is not met, the standard VAT rate of 21% will apply, and the customer will bear responsibility for the payment of tax, interest and penalties due."
This mention must appear on every invoice where the 6% rate is applied. It cannot be abbreviated or rephrased. Using the exact text is essential for the invoice to be compliant with the regulations.
Consequences if the mention is missing
Omitting this mandatory mention from an invoice where the 6% rate is applied can lead to serious consequences for both the contractor and the client.
For the contractor
If the mention is missing from the invoice, the VAT administration may consider that the 6% rate was applied without justification. The contractor then faces a VAT reassessment, meaning they will have to pay the difference between the 6% rate invoiced and the 21% rate that should have applied. This reassessment is accompanied by late payment interest calculated from the date of issue of the invoice.
In addition, administrative fines may be imposed. Depending on the severity of the infringement and the contractor's history, these fines can range from 10% to 200% of the evaded VAT. In cases of repeated offences or blatant fraud, criminal prosecution is not ruled out.
For the client
When the mention is present on the invoice and the client does not contest it within the one-month period, they are presumed to have confirmed that all three conditions are met. If a subsequent audit reveals that one of the conditions was not fulfilled, it is the client who bears the responsibility for paying the additional VAT, interest and fines. This liability is explicitly provided for in the text of the mention itself.
How to verify whether a building qualifies
Before invoicing at the 6% rate, it is wise to verify the building's eligibility. Here are the recommended steps:
- Check the building's age: consult the land registry or the property deed to determine the date of first occupation. You can also refer to the urban planning permit or municipal records.
- Confirm residential use: make sure the building is primarily used as a private residence. In the case of mixed use, assess the proportion allocated to housing.
- Identify the client: verify that the client is indeed a final consumer (private individual) and not a company acting within the scope of its professional activity.
- Document the verification: keep a copy of the documents consulted (land registry extract, client attestation) in your project file in case of an audit.
If there is any doubt about any of these conditions, it is better to apply the 21% rate and request written confirmation from the client, or to consult a tax advisor.
Practical examples for renovation contractors
Example 1: Bathroom renovation
A plumber is hired to completely renovate the bathroom of a house built in 1995. The owner lives there as their primary residence. The house is more than 10 years old, it is used as a private dwelling, and the client is a private individual. All three conditions are met: the plumber can invoice at the 6% rate, provided they include the mandatory mention on their invoice.
Example 2: Painting an office building
A painter receives a commission to repaint the premises of a company housed in an office building constructed in 2000. Although the building is more than 10 years old, it is not used as a private residence. The residential use condition is not met: the 21% rate must be applied.
Example 3: Insulation of a recent house
An insulation contractor receives a request to insulate the roof of a house first occupied in 2020. Even though the house is used as a primary residence by a private individual, it is not yet 10 years old. The 21% rate applies. The contractor will have to wait until 2030 before being able to apply the 6% rate for this building.
Example 4: Work on a mixed-use building
An electrician needs to redo the electrical installation of a building where the ground floor is occupied by a shop and the upper floors by apartments. If the residential part represents more than 50% of the building's total use, the 6% rate applies to all work, including work carried out in the commercial part, provided the other conditions are met. If the commercial part exceeds 50%, the 21% rate applies to all work.
Common mistakes to avoid
Many contractors make mistakes that can prove costly during a tax audit. Here are the most frequent ones:
- Forgetting the mention on the invoice: this is the most common and most easily avoidable error. Every invoice with a 6% rate must contain the full text of the mention.
- Abbreviating or rephrasing the mention: the mention must be reproduced word for word. A shortened or modified version is not compliant and exposes the contractor to a reassessment.
- Not verifying the building's age: applying the 6% rate to a building less than 10 years old is an offence, even if the client claims they are entitled to it.
- Applying the 6% rate for commercial premises: the reduced rate is reserved for private dwellings. Invoicing work in an office or shop at 6% is non-compliant.
- Applying the 6% rate to a building used mainly for professional purposes: in the case of mixed use, the 6% rate only applies if private housing represents more than 50% of the building's use. In that case, the 6% rate applies to all work.
- Not keeping supporting documentation: in the event of an audit, the contractor must be able to demonstrate they had legitimate reasons to believe the conditions were met.
How Flexina helps manage this mention
With Flexina, you can configure the mandatory mention for the 6% reduced rate in your invoice templates:
- VAT rate configuration: create and manage your different VAT rates (6%, 21%, etc.) in your account settings.
- Customizable mentions: add the mandatory mention text in your invoice templates. Once configured, this text appears on all invoices using the 6% rate.
- Multilingual: configure your mentions in French, Dutch or German depending on your clients' language.
- Peppol compatibility: invoices sent via the Peppol network include the VAT rates you have configured.
It is your responsibility to verify that the conditions for applying the 6% reduced rate are met for each project before issuing your invoice.
