BREAKING NEWS: New B2B mandate to come!
So now that e-invoicing has been made mandatory in Belgium in the B2G sector, the Belgian government is talking about extending this requirement to the B2B sector. This is according to Belgian Finance Minister Van Peteghem. The aim is to further reduce the VAT gap as a result. With this regulation, Belgium is following behind many other EU countries that have already introduced and in some cases implemented this regulation.
With the resulting reduction in the use of paper and other resources required by traditional electronic invoicing, the financial savings are estimated at €3.5 billion per year.
The Belgian B2B mandate
So far, there is no more detailed information on what the mandate will look like and when it will actually be introduced. However, based on experience from other countries, it can be assumed that large companies will make use of the new regulation first, followed by medium-sized companies and finally small companies.
There is talk of the Belgian PEPPOL network, which was already introduced in 2016, also being applied to the implementation of electronic invoice exchange between companies. This would mean that invoices will have to be issued in a structured format and that sending PDF invoices by e-mail will no longer be possible.
It remains exciting to see when and how electronic invoices will be mandatory for the B2B sector. INPOSIA will continue to keep you up to date!
In order to realize significant savings, new legal regulations for public procurement were passed by the EU authorities in 2014. With the adoption of directive 2014/55/EU on e-invoicing, all European government agencies will be required to receive structured e-invoices from their suppliers. Belgium is also affected by this.
The primary objective of the directive is to induce cost advantages by automating the exchange of invoice data in a structured format. In Europe, this should lead to significant savings through increased efficiency in public procurement and as well as relevant government departments. The European Commission estimates that over 250,000 EU public authorities spend approximately 14% of the overall GDP on the purchase of various services (supplies, works, other services, etc.). This represents annual expenses of around 2 trillion euros. Based on the beforementioned regulation, an increase in efficiency by 1% can be expected. This corresponds to potential saving of 20 billion euros per year.
Both Belgium and other EU countries have worked in recent years to ensure compliance with the 2014/55/EU directive. Electronic invoices are supposed to be used instead of the typical paper invoices in all business-to-government (B2G) procurement transactions.
Despite the uniform resolution to standardize and simplify B2B document exchange through electronic invoicing, the federal legal landscapes of different countries have led to individual regulations. This is the case both in Belgium and other EU countries.
The Flemish government immediately imposed compliance with the rules on electronic invoicing. Since January 2015 this regulation has been mandatory for all public institutions in the region. Suppliers of central public institutions have been required to send invoices in electronic form since January 2017. Paper invoices amounting to more than 135,000 euros have been rejected since 2018.
Since January 2017 suppliers have the opportunity to send e-invoices to any government agency at national level. Public institutions in Belgium must be able to receive and process electronic invoices since April 2019.
Adjusted VAT rates
Another measure adopted by the country to tackle the Covid-19 crisis is the adjustment of VAT. Therefore, a reduced VAT rate of 6% will apply to the supply of masks and hydroalcoholic gels from June 30-September 30, 2021. In the same period, the reduced interest rate on outstanding VAT, customs, and excise debts will also apply. You can also see more about the individual VAT rates in many other countries in our new VAT country list.
New regulations from July 2021
Due to the new EU VAT package for e-commerce, Belgium has now also published its plans to adapt to the new regulations. The deadline for this is set for July 1, 2021. All e-commerce imports, EU-wide e-commerce VAT reporting, and marketplaces will be affected. The specific draft law is number DOC 55 1820/001 and can be read in French and Dutch.
The specific changes are as follows:
- A lifting of the previous thresholds for B2C distance sales in the EU and the introduction of a new threshold of 10,000 for mandatory compliance with VAT at the place of supply.
- As a result, VAT must be charged on all B2C sales made on a distant selling basis
- To assist Belgian sellers, the one-stop-shop VAT return would also be introduced here for all sales to EU consumers in other countries, which is an extension of the existing MOSS return
- The OSS return will be required quarterly in Belgium, along with a record of all VAT payments that must be kept for 10 years
- The requirement of VAT on all import sales to Belgian consumers, raising the threshold for this to €22
- The introduction of a new import one-stop store declaration to report all related imports in each EU member state
Digital VAT registrations
VAT payers will also have to prepare for additional obligations as of July 12, 2021. The government now requires all taxpayers to register via an online process. This eliminates the previous paper-based registration process. Changes to any registration data or deregistration must also be carried out via the tax administration’s electronic portal.
In this way, Belgium is contributing to the increasing avoidance of physical documents, which pose a health risk, particularly in the context of the Covid-19 pandemic.
The electronic B2G invoicing process in Belgium is handled via the Mercurius platform. Mercurius was developed by the Belgian government and is part of the PEPPOL network. To exchange invoices or credit notes via the Mercurius platform, these documents must comply with the PEPPOL BIS 3.0 document format.
Sending invoices to public institutions
1. Manual input via Mercurius
The basic method for transmitting structured e-Invoices and credit notes is to use the manual invoice form on the Mercurius platform. The Mercurius interface also allows Belgian companies to check the status of the documents sent. This option is particularly popular with suppliers who currently neither have EDI structures nore receive multiple orders from public institutions. Other companies avoid this method because of the manual effort involved. Mercurius is only available for Belgian companies.
2. PEPPOL network
Compared to direct transmission via the Mercurius platform, PEPPOL document transfer is fully automated. Companies benefit from the time and cost advantages of fully automated message exchange processes. Everything that is required is a connection to a PEPPOL access point. By using PEPPOL, multiple connections or service providers are no longer necessary, regardless of how many companies are supposed to be connected via PEPPOL in order to exchange documents. Documents can therfore be exchanged with any other connected company requiring minimal effort.
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1. Via PEPPOL
Companies that have a connection to a PEPPOL access point do not need to have any concerns about receiving structured documents. The responsible service provider should ensure that all necessary images are available to convert the received documents into a format that the recipient ERP system can interpret. However, it must be taken into account that not all PEPPOL access points offer the same service. For example, not all providers are yet AS4-compatible. Many access points also do not have an API connection. This brings a number of advantages, such as significantly improved data visibility or easy troubleshooting.
2. Via Hermes
Hermes is a platform developed by the Belgian government complementing Mercurius in order to translate PEPPOL-BIS documents into a readable form (XML in PDF format) and send them via e-mail. Just like sending invoices directly via Mercurius, Hermes also requires manual effort from the recipient to process invoices.
Mercurius is currently used (directly or indirectly via PEPPOL) by around 25,000 economic actors and almost 2,000 public clients. More thn one million invoices have already been sent via Mercurius.
Future of e-invoicing and EDI in Belgium
As Belgium is required to provide e-invoices for all B2G transactions, Belgium is already more advanced in the field of B2G process automation than other European countries. Due to the benefits that many companies have experienced by switching to e-invoicing, more and more companies are willing to automate their data exchange processes. With the expansion of electronic data transmission, both EDI and electronic invoicing processes are becoming increasingly popular in B2B and B2G processes.
Are you interested in international e-invoicing?
INPOSIA is your partner of choice for electronic data exchange or electronic invoicing solutions! Our experts are happy to help you with any questions you may have about e-invoicing.
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INPOSIA e-invoicing Specialist