First, the basic principle
As soon as you issue an invoice, VAT becomes due. Whether your customer pays or not, the tax authorities expect their share. It may feel unfair, and to some extent, it is.
Fortunately, Belgian legislation, in line with Article 90 of the European VAT Directive, allows you to reclaim the VAT you have paid when a claim becomes definitively uncollectible. But “definitively” is the key word here.
Late payer vs. uncollectible debtor, a crucial distinction
A customer who pays three months late is not necessarily an uncollectible debtor. Frustrating, yes, but VAT recovery is not yet applicable at that stage.
You can only speak of an uncollectible claim when there is clear evidence that payment will no longer be made. For example:
- Bankruptcy or judicial reorganization of your customer
- An official statement of insolvency
- Continued non-payment after repeated reminders and proven recovery attempts
- A certificate of uncollectibility
This distinction is not only legally important, it also determines when you can take action towards the tax authorities.
What do you need to prove?
Recovering VAT is not automatic. You must demonstrate that you have taken sufficient steps to collect the debt.
In practice, this means sending payment reminders, issuing formal notices, involving a collection agency, bailiff, or lawyer, and possibly initiating legal proceedings.
If your documentation is in order, you are in a strong position. If you improvised along the way, you may run into problems.
Make sure you have:
- Copies of all invoices and reminders
- Correspondence with the debtor
- Proof of recovery efforts, for example bailiff intervention
- A bankruptcy judgment or report from the trustee, if applicable
The practical steps
If the claim is uncollectible, the VAT recovery is processed through your periodic VAT return, but there are several required steps.
Step 1, Write off the claim
In your accounting, you record the receivable as uncollectible, via a value adjustment or write-off.
Step 2, Issue a credit note
You issue a corrective document or credit note for the uncollectible amount, clearly referring to the original invoice and stating the reason, such as uncollectible debt or bankruptcy.
Step 3, Include it in your VAT return
You include the credited VAT in the correction fields of your VAT return. The exact boxes, for example 61 or 64, depend on your situation, so it’s best to have your accountant handle this correctly.
What if your customer eventually pays?
It happens, a customer you had written off still makes a payment.
In that case, you must repay the VAT you previously reclaimed, based on the amount actually received, in the period of receipt.
From an accounting perspective, you reverse the value adjustment in your results. Administratively, you include the VAT due in your return.
No reason to panic, but it is something you need to keep track of.
The common thread, document everything
Recovering VAT on uncollectible invoices is a right, but it is a right that depends on proof.
Businesses that take debtor management seriously, send reminders, follow up properly, and keep records, are in a much stronger position with the tax authorities.
And the earlier you have a case handled professionally, the clearer the timeline of your efforts.
Want professional follow-up for outstanding invoices?
With Unpaid, you submit your case digitally. Within five working days, we initiate a legal procedure and send a bailiff, without the need for a lawyer or court involvement.
In most cases, we recover the full principal amount. If recovery is not possible, we provide you with a certificate of uncollectibility, allowing you to reclaim the VAT.