Belgium Construction Industry Tax Guide

VAT Reverse Charge in Construction (BTW-Verlegd)

• Bouw-BTW verlegd regime: In the construction sector, the reverse charge (BTW-verlegd / TVA reverse charge) applies to services provided by a subcontractor to a principal contractor (art. 20 van KB nr. 1 / art. 20 de l'AR n° 1). The subcontractor issues an invoice without VAT and states "BTW verlegd naar de afnemer" / "TVA reverse charge". The principal accounts for the VAT as both output tax (to pay) and input tax (to recover) — net effect: zero cash flow impact for both parties.
• Scope: The reverse charge applies to: (a) construction, renovation, and demolition services provided by subcontractors to principals, (b) the supply of construction workers by temp agencies to construction companies, (c) cleaning services on construction sites. It does NOT apply to: (a) construction services provided directly to the end user (the building owner), (b) the supply of building materials without installation, (c) services by architects, engineers, and consultants (standard 21% VAT).
• Principal obligation: The principal must verify that the subcontractor is VAT-registered and must report the reverse-charge VAT in the VAT return. The invoice must state the subcontractor's VAT number, the principal's VAT number, and a reference to "BTW verlegd" / "TVA reverse charge". The reverse charge is mandatory — if the subcontractor incorrectly charges VAT, the principal cannot recover it as input VAT (the VAT is not deductible).

Chain Liability (Ketenaansprakelijkheid)

• Construction chain liability: The ketenaansprakelijkheid (art. 30bis Wet van 27 juni 1969 / art. 30bis de la loi du 27 juin 1969) applies to the construction sector. The principal is liable for the subcontractor's unpaid social security contributions (RSZ/ONSS) and withholding tax (bedrijfsvoorheffing) if the subcontractor defaults. The liability extends up the entire chain — the building owner may be liable if the main contractor defaults.
• G-rekening (G-account): The principal can avoid the ketenaansprakelijkheid by requiring the subcontractor to use a G-rekening (G-account / Compte-car). The principal pays the subcontractor's invoice into a G-rekening — a blocked account held by a bank or notary. The G-rekening automatically withholds 35% of the payment (the estimated RSZ/bedrijfsvoorheffing component) and releases 65% to the subcontractor. The Belastingdienst debits its share from the G-rekening when the subcontractor files its social security declaration. Using a G-rekening is standard practice in construction — principals require it for all subcontractors.
• Bouwkaart (Carte de construction): The bouwkaart (construction card) is a mandatory electronic system for tracking hours worked by construction workers on each construction site. The card records: (a) the worker's identity, (b) the employer, (c) the hours worked, (d) the construction site location. The system is used by the RSZ/ONSS to verify social security contributions and working hours. Non-compliance with the bouwkaart system carries fines of €500–€5,000 per worker.

Reduced VAT on Renovation — 6%

• Renovation of private dwellings (Woningen >10 jaar / Habitations >10 ans): The renovation and repair of private dwellings that are more than 10 years old qualifies for the 6% VAT rate on the labour component (and materials if supplied as part of the total project). Qualifying works: (a) all renovation, repair, and maintenance services, (b) including: electrical, plumbing, roofing, insulation, windows, heating, painting, tiling, (c) demolition and reconstruction of the same building volume. The 6% rate applies to the total invoice (labour + materials) if the contractor supplies the materials as part of the project.
• Conditions: (a) The dwelling must be >10 years old (measured from the first occupation date — confirmed by the KI/cadastral registration), (b) the work must be for a private dwelling (owner-occupied or rental), (c) the contractor must be VAT-registered, (d) the contractor must issue an invoice stating "TVA 6% — logement >10 ans" / "BTW 6% — woning >10 jaar". The reduced rate does NOT apply to: (a) new construction (21%), (b) work on commercial premises (21%), (c) the supply of materials without installation (6% for labour only, 21% for isolated material supply).

Construction Investment Deduction

• Investment deduction for construction equipment: Construction companies can claim the investment deduction (investeringsaftrek / déduction pour investissement) for qualifying assets: (a) construction machinery (excavators, cranes, bulldozers, loaders — 8% deduction rate), (b) digital assets (construction management software, BIM software, project management platforms — 13.5% deduction), (c) safety equipment (personal protective equipment, site safety systems — 20% deduction), (d) energy-efficient equipment (electric construction vehicles, energy-efficient site cabins, solar panels for site offices — 20% deduction).
• Accelerated depreciation: Certain construction assets (construction machinery, heavy equipment) can be depreciated over a reduced useful life: (a) heavy construction machinery: 5–10 years (instead of 10–20), (b) light construction equipment: 3–5 years, (c) construction software: 3 years. Accelerated depreciation does not change the total deduction — it shifts it to earlier years (a timing advantage).

For related reading, see our VAT/BTW Guide →, Hiring Employees Guide →, and Corporate Tax Guide →.