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6% VAT Rate Remains Temporarily in Effect for Installations During Renovations
The Belgian federal government has announced a delay in the adoption and publication of the new program law (document no. 56 0909/001) that includes a planned revision to the 6% reduced VAT rate for heating systems powered by fossil fuels.
Due to unexpected delays in parliamentary proceedings, the law has not yet been voted on, promulgated, or published in the Moniteur belge (Belgian Official Gazette). As a result, the existing reduced VAT rate of 6% remains applicable for the delivery and installation of fossil-fuel-based heating systems in renovation projects, provided all applicable conditions are met.
No Retroactive VAT Rate Increase
Authorities have clarified that no retroactive increase in VAT will apply. The standard reduced VAT rate may continue to be used until the new law officially enters into force.
Demolition and Reconstruction Projects to Face Stricter Rules
In contrast, for demolition and reconstruction projects, the draft text of the program law explicitly excludes the application of the 6% VAT rate to:
- Delivery and installation of fossil-fuel-based heating systems
- Real estate work and final delivery of reconstructed homes with such systems
Barring further legislative changes, this exclusion is expected to take effect on July 1, 2025.
Transitional Measures to Apply for Existing Contracts
Following a decision by the Minister of Finance, the government has committed to establishing a transition period for contracts concluded prior to the new law’s entry into force. During this interim period, the 6% VAT rate will continue to apply under certain conditions.
The detailed terms and administrative guidelines for this temporary tolerance are expected to be published shortly.
Key Takeaways for Tax Professionals and Developers
- The 6% VAT rate remains temporarily valid for fossil-fuel system installations in renovation contexts.
- No retroactive application of the new rule is foreseen.
- Stricter exclusions apply for demolition-reconstruction projects as of July 1, 2025.
- Transition arrangements will protect contracts signed before the new rules take effect.
Tax professionals, real estate developers, and installers should monitor official updates to ensure timely compliance and proper application of VAT rates.
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