The VAT exemption for small businesses: when it helps and when it hurts
Belgium lets very small businesses opt out of VAT below a turnover threshold. It sounds simpler, and for some it is — but for a typical B2B IT freelancer, the exemption usually costs more than it saves.
What the scheme does
Under the small-business VAT exemption, you do not charge VAT on your invoices and you do not file periodic VAT returns. In exchange, you cannot deduct the VAT on your own purchases. It is available below an annual turnover threshold.
Why B2B freelancers usually skip it
If your clients are VAT-registered businesses, they reclaim any VAT you charge, so charging VAT costs them nothing — but staying in the normal regime lets you deduct VAT on your hardware, software and expenses. For B2B, the exemption typically means losing deductions for a simplicity you did not need.
- Exemption: no VAT charged, no periodic returns, no input VAT deduction
- Only available below the annual turnover threshold
- Great for B2C or very low-cost activities
- Usually the wrong call for B2B freelancers with real expenses
Frequently asked
- Who benefits from the exemption?
- Typically very small B2C activities with low input costs, where not charging VAT is a real price advantage and lost deductions are minimal.
- Can I switch later?
- The regime is not permanent, but switching has rules and timing. Discuss the move with your accountant before committing either way.
This article is general information for a one-person company (BV/SRL), not tax advice. Rules and figures change — confirm your situation with your accountant before acting.
Keep reading
- ComplianceTax return deadlines 2026: what freelancers must not miss
- ComplianceSelf-employed social contributions: how the provisional-then-final system works
- ComplianceMandatory B2B e-invoicing from 2026: what freelancers must do
- Expenses & deductionsDisallowed expenses: the costs your company pays but cannot fully deduct