On the 1st of April 2019 the Law of the 26th of November 2018 came into force and changed the way the Belgian tax administration can collect payment of outstanding VAT debts. Prior to the entry into force, the tax administration had to draw up a writ of execution (dwangbevel (NL) – contrainte (FR)) which allowed them to collect the outstanding debt.
The new Law provides the possibility for the tax administration to include VAT debts in the “collection and recovery register” (innings- en invorderingsregister (NL) - registre de perception et recouvrement (FR)).
The writ of execution, is no more. The new debt collection is subject to a certain procedure, which will be briefly discussed in this article.
1. Prior notification to the debtor
The VAT debt and its justification have to be notified to the debtor at least one month prior to the inclusion in the collection and recovery register.
However, if the debtor has declared their VAT activities and the debt is in relation to these activities, the date of the declaration will serve as date of notification. This makes sense, as the debtor himself declares to have a certain debt towards the Tax administration.
As is the case with almost every limitation period in cases related to tax, the starting point of the one month period is the third business day after the notification was handed to the postal services for delivery.
2. Inclusion in the register
The debt will then be included in the collection and recovery register, altogether with all accessories (e.g. interest) and possible fines.
After the administrator-general of the tax administration has drawn up the register and declared it enforceable, it will serve as an enforceable title (cfr. the former writ of execution), which will allow a bailiff to coerce the debtor to payment by means of seizure and public sale of their property for example.
3. Notification of the decision
The debtor will then be notified of the decision of the administrator-general by post. This will usually include an invitation to pay the debt voluntarily as to prevent unnecessary costs.
The collection and recovery register is enforceable against every co-debtor. If, for example, three associates are the shareholders of a moral person with unlimited liability, a register drawn up in name of one of them, will serve as enforceable title against all of them.
4. Debt collection
Something that remains unchanged is the fact that the tax administration has a general privilege to any and all assets of the debtor for the payment of the entire outstanding debt. Only the beneficiary of a special privilege (e.g. mortgage provider) will be paid before the tax administration with the proceeds that come from the sale of the good that falls under the scope of the special privilege.
Should you have any questions in regards to your taxes or your rights against the tax administration in general, we at Vanbelle Law have many years of extensive experience in dealing with such matters and therefore will be more than happy to help!