Formal requirements for invoices
The invoice is the commercial document par excellence. It confirms the goods and services provided for which payment must be made.
In order for the taxpayer to be entitled to a deduction, a substantive condition must first be met: the goods and services provided to them (by another taxpayer acting as such) must be used for the transactions that give rise to the deduction (Article 45 of the VAT Code). However, for this right to deduct to be exercised, a formal condition must also be met: the taxpayer must be in possession of an invoice (1) that has been correctly issued (in the proper form) and (2) that contains the mandatory information specified in Article 5, § 1, Royal Decree no. 1. (Article 3, § 1, 1° RD no. 3).
An invoice that is prepared and issued properly, in terms of both content and form, is therefore crucial, not only in order to avoid penalties for the issuer but to ensure that the customer does not risk losing their right to deduct VAT, as this could potentially compromise the commercial relationship between supplier and customer.
From 1 January 2026, every VAT-registered company conducting B2B transactions is legally required to send and receive structured electronic invoices (e-invoices). While invoices will thus be presented in a new form, the other formal requirements remain fully applicable, including for e-invoices (invoice information, language, currency, etc.).
- Firstly, an invoice will only be VAT-compliant if it includes the mandatory information. This is the information set out in Article 5, §1 of Royal Decree No. 1: for a list, read more in this article about VAT-compliant invoicing: a succinct enumeration of the points to consider. One of these mandatory details concerns the information necessary to assess the transaction and determine the rate, specifically: ‘the usual description of the goods supplied and the services provided, their quantity, and the object of the services’.
- For credit notes specifically, a reference to the underlying invoice that is being corrected/supplemented must also be included, and if applicable, the statement ‘any deducted VAT to be refunded to the state’.
- The use of the word ‘invoice’ is not mandatory in this instance.
- The VAT legislation does not contain any specific provisions regarding the language in which the invoice must be drawn up. However, the VAT authorities may require a translation if the invoice is drawn up in a language other than one of the national languages, and other legislation (such as language legislation) must also be taken into account.
- The invoice must state both the taxable amount and the (total) VAT amount. In principle, however, only the VAT amount due has to be expressed in the national currency of the competent member state. If the taxable amount is expressed in a different currency, a conversion to euros is required for reporting purposes in the VAT accounts (and in the VAT return). The applicable exchange rate is that agreed between the parties (as stated in the contract or on the invoice) or, failing that, the latest indicative rate for the euro published by the European Central Bank or the National Bank of Belgium.
Belgian case law is also continuing to evolve regarding the formal requirements for invoices.
Refusal of deduction and penalties for incorrect or incomplete invoices
The formal requirement for VAT deduction
The main rule is that VAT is deductible at the time it becomes due (claimable). In the context of the supply of goods and services, it is therefore deductible at the time when the goods or services were provided. When an invoice is issued, VAT is due at the time of invoicing.
Case law has repeatedly confirmed that VAT is not deductible if the invoice does not meet the formal requirements. In particular, there is increasing scrutiny of the inclusion of the usual name and quantity of the goods supplied and the usual name of the services provided and their object.
For example, in a case last year, the Antwerp Court of Appeal once again emphasised the importance of a correctly drawn up invoice. In this case, the invoices had not stated the days on which work was performed or the type of services provided. Furthermore, no documents such as service records, contracts, schedules or emails were submitted to demonstrate that one contracting party's services had been used by the other. Finally, the Court noted that analysis of the invoiced services suggested an unrealistically high number of hours charged and fraudulent intent. The VAT deduction was therefore refused, and the VAT taxpayer was also ordered to pay a 200% fine.
The Ghent Court of Appeal also emphasised that invoices must meet the formal requirements set out in Article 5, §1, Royal Decree No. 1, in order for VAT to be deducted. In the case in question, a clear description of the service provided was lacking, and the contractual relationship between the parties could not be proved by means of any written document. Where the invoice description is unclear, it is always recommended that you should be able to prove the services or goods supplied by means of agreements, contracts, email correspondence, quotations, etc.
A general description of the services and goods supplied on the invoice is not sufficient in itself: the invoice must always contain the information ‘necessary to determine the transaction and the tax rate.’
In other words, it is important that you, as the recipient of the invoice, should always be able to prove that the services and goods were actually provided in order to benefit from the VAT deduction and avoid penalties.
However, the consequences will not always be as severe as in the cases discussed. An overly formal approach has been nuanced by the case law of the European Court of Justice according to the ‘substance over form’ principle: the fundamental principle of VAT neutrality requires the deduction of input VAT to be permitted if the substantive conditions are met, even if certain formal conditions are not met (ECJ, Senatex GmbH, C-518/14, 15.09.2016, paragraph 38; ECJ, Barlis, C-516/14, 15.09.2016, paragraph 42; ECJ, Trawertyn, C-280/10, 01.03.2012, paragraph 41).
In Belgium, the ‘substance over form’ principle is recognised in circular 2017/C/64 of 12 October 2017 (no. E.T. 131.409): If the tax authorities have the information necessary to establish that the substantive conditions are met, they may not impose additional conditions on the taxpayer’s right to deduct the tax that might prevent the exercise of that right (ECJ, Barlis, C-516/14, 15 September 2016, paragraph 42).
However, a penalty could still be imposed...
Even so, the formal deficiencies will sometimes be accompanied by inadequate evidence of the veracity of the claimed services, in which case the right to deduct VAT will not be accepted in any case. This was also true in the cases discussed above.
As the recipient of goods and services, you should therefore ensure that, in addition to the formal requirements for the invoice, there is also sufficient evidence to demonstrate the veracity and veracity of the goods and services provided (contract, email correspondence, quotations, etc.), especially where there is an unclear invoice description.
What about deductibility for direct taxes?
Costs are only deductible if certain conditions are met. For example, the ‘authenticity and amount’ must be substantiated with supporting documents. Deductibility can usually be justified by an invoice; however, if this is insufficiently detailed to determine what specific goods or services were provided, problems may arise.
This was recently confirmed by the Ghent Court of Appeal, which refused the deduction of costs because the description of the services on the invoice was very vague and there was no additional information to prove the veracity of the services (and the amounts).
To avoid jeopardising deductibility, it is therefore advisable to request a new, sufficiently detailed invoice if the one which has been received is too vague. In addition, always ensure that the (authenticity and veracity of the) services or goods provided can be demonstrated by means of agreements, contracts, email correspondence, quotations etc.
E-invoicing from 1 January 2026
Up to 31 December 2025, both electronic (with the recipient’s consent) and paper invoices may be issued.
However, from 1 January 2026 structured electronic invoices will become fully mandatory for transactions between Belgian VAT-registered businesses (B2B). It may be possible to send a pdf or paper version of the invoice as well, but the structured electronic invoice is the only one that is legally compliant. This must therefore meet all formal requirements and contain the required invoice details.
The introduction of e-invoicing can be seen as a first step towards e-reporting via the Peppol network. The e-invoice must meet the EN 16931-1 and CEN/TS 16931-2 standards. In practice, e-invoices will take the form of an XML file, which allows the invoice to be processed automatically in the accounting system. For an overview of e-invoicing, see these articles about mandatory e-invoicing in the B2B sector: Benefits and the introduction of the Belgian e-mandate and Peppol Network, scope, fiscal incentives and practical steps by Lorien Van den Bempt and Sylwia Radomska.
The issuing of structured electronic invoices will in principle become mandatory
- for all B2B transactions between (Belgian) companies,
- whose customer is under an obligation to receive (and automatically process) e-invoices, and
- for local transactions subject to Belgian VAT. The following three rules must be met.
Rule 1. The issuing of structured electronic invoices will become mandatory for all B2B transactions between (Belgian) companies established and registered for VAT in Belgium. However, the obligation does not apply to:
- Foreign taxpayers who are not established in Belgium, but are registered in Belgium for VAT purposes if necessary (not a Belgian establishment)
- Belgian entities that exclusively carry out exempt transactions (e.g. in the financial sector or in the medical, educational, social, sports or cultural sectors)
- Bankrupt VAT taxpayers (with a still active VAT number)
- Flat-rate taxpayers (under the regime to be phased out by 1 January 2028 at the latest)
Rule 2. Customers must be entities established in Belgium that are required to file regular periodic VAT returns and to provide their Belgian VAT number to suppliers or service providers. This means that there is no obligation to issue/receive structured electronic invoices to/by:
- Foreign taxpayers who are not established in Belgium, but are registered in Belgium for VAT purposes if necessary (not a Belgian establishment)
- Belgian entities that exclusively carry out exempt transactions under Article 44 of the VAT Code (e.g. in the financial sector or in the medical, educational, social, sports or cultural sectors).
Rule 3. Regarding the transactions, the issuing of structured electronic invoices is mandatory for all local transactions subject to VAT. This therefore also applies to transactions subject to the reverse charge mechanism (e.g., work on property by contractors). However, there is no obligation to issue/receive structured electronic invoices for, among other things:
- transactions that are exempt under Article 44 of the VAT Code (e.g. in the financial sector or in the medical, educational, social, sports or cultural sectors)
- transactions deemed to take place for VAT purposes in another EU member state or outside the EU.
This means that, from 1 January 2026, in a B2B relationship, structured electronic invoices containing the legally required information under Article 5 of Royal Decree no. 1 will be the only legally compliant invoices.
- Suppliers/service providers who fail to issue such invoices may, on this basis, incur a reduced proportional fine, depending on the case, ranging from 60% to 100% of the VAT amount.
- Customers who are unable to receive such structured electronic invoices, or to receive them correctly, therefore do not have a legally compliant invoice with which to exercise their right to deduct VAT (Article 3 of Royal Decree no. 3). If reverse charging applies, the customer will have to pay the VAT, but in principle cannot deduct it. This does not change even if a pdf invoice is received. Furthermore, incorrect VAT deductions are subject to a reduced proportional fine of 10% of the VAT.
- Aside from the refusal of the VAT deduction, there is currently no information regarding any other risks for customers if they cannot (correctly) receive structured electronic invoices.
In addition to the authenticity and veracity of the services provided, e-invoices must also meet the formal requirements for invoices, including the mandatory invoice information such as a clear description of the goods supplied and services provided.
