Belgian Non-deductible VAT

This topic details two common scenarios for applying non-deductible tax for Belgium. Both scenarios below are in Euros.

Scenario 1

A payable invoice where VAT is 100% deductible.

Example

Net Value VAT 21% Invoice total
1,000 210 1,210
 
  1. Create an invoice and add the full VAT amount to the expense. In this scenario you must enter an expense or product line with a total value of 1,210 EUR.
  2. Create a specific tax code for non-deductible tax with a rate of 0%.
  3. Enter that tax code to the expense or product line.
  4. Post the invoice.

The transaction looks like this:

General Ledger AccountDebitCredit
600 Expense GLA1,210 
4720 Tax non deductible

0

 
400 Supplier 1,210

Scenario B

A payable invoice where VAT is 50% deductible.

Example

Net ValueVAT 21%Invoice total
1,0002101,210
 
  1. Create an invoice and add 50% of the VAT amount to the expense. In this scenario you must enter an expense or product line with a total value of 1,105 EUR.
  2. Create a specific tax code with a rate of 50%.
  3. Enter that tax code to the expense or product line.
  4. Post the invoice.

The transaction looks like this:

General Ledger AccountDebitCredit
600 Expense GLA1,105 
4721 Tax deductible105 
400 Supplier 1,210