The first optimization to consider concerns your invoicing flow itself.

Payment timing of your invoice

If you pay an invoice before the VAT return is filed and the VAT deduction is effectively applied, this creates a cash-flow impact.

For example, consider an incoming invoice dated at the beginning of October that is paid, including VAT, by the end of October. The VAT can only be recovered through the VAT return for the fourth quarter, filed in January of the following year. For a quarterly filer, this results in a three-month cash-flow impact. If you are in a VAT refund position, the refund processing period must also be added before the refund is actually credited to your bank account.

To limit this impact, it is best to make full use of the payment term permitted by law.

Apply your VAT deduction promptly, but not too early

One way to optimize your cash flow is to deduct valid invoices promptly in your VAT return. However, it is equally important not to do so too early. A recent judgment of the Court of Justice in case C-167/26 RX of 10 September 2026 confirmed that the right of deduction may be exercised only in the period in which both conditions are first satisfied, namely:

1) The goods or services have been supplied; and
2) The taxable person holds a compliant invoice.

Member States may therefore refuse the deduction in an earlier VAT period if the invoice was received only in a later period. Accordingly, if you receive an invoice between the 1st and the 20th of a month, for example on 5 August, it may not be included in the return filed that same month, for example the July VAT return filed in August. The invoice belongs in the following return period, filed in September

Invoices subject to the reverse charge (B2B or immovable property work)

For intra-Community acquisitions and purchases of immovable property work, you should ensure that the VAT is reverse charged to you. This is regularly overlooked, particularly for smaller construction works.

An invoice on which the reverse charge is correctly applied has a positive cash-flow effect, because you can account for the VAT due to the State and deduct it directly in the same VAT return.

In practice, this sometimes goes wrong. In that case, you face not only a cash-flow risk but also a risk of fines and interest because, as the customer, you remain legally liable for the VAT. If you deduct VAT charged incorrectly on an invoice that should have been issued under the reverse-charge mechanism, you have both (i) deducted that VAT incorrectly and (ii) failed to account for the VAT due.

Monitoring unpaid invoices

It is also advisable to monitor unpaid invoices adequately. If the price, or part of it, remains unpaid, you as a taxable person are entitled to correct the unpaid invoice by issuing a credit note and to reclaim from the State the VAT already remitted.

In practice, the tax authorities will not dispute that the loss is definitive where the loss has been recorded in the profit and loss account, provided that, as creditor, you can demonstrate by all available facts or legal means that the receivable must be regarded as irrecoverable. It is therefore advisable to retain all available supporting evidence, such as the RegSol filing, CBE records and communications concerning non-payment.

Another way to improve your VAT cash flow is to further automate your VAT process. The introduction of e-invoicing and the planned e-reporting from 2028 onwards provide an ideal opportunity to do so. It is therefore useful to assess which solutions are available, where bottlenecks remain in your process and where further optimization is possible.

A streamlined and highly automated process helps reduce errors and enables checks to be performed before the data is even submitted to the authorities. At PKF BOFIDI, we would be pleased to advise you on this development and support you in further optimizing your VAT control process.

Do you import goods? If so, applying for an E.T. 14,000 authorization can produce a significant cash-flow benefit. Without such an authorization, as a taxable person you must pre-finance the VAT that becomes due by paying it to Customs.

For example, if you import goods in September 2026 and release them for consumption in Belgium, the VAT payable to Customs can only be deducted one month later in your Belgian periodic VAT return. The impact may be even greater for a quarterly filer.

An E.T. 14,000 authorization allows you to shift the import VAT due upon customs clearance to your periodic VAT return. The payment and deduction of VAT then take place simultaneously in your VAT return, eliminating the cash-flow impact.

Another optimization to consider applies if you are a mixed taxable person.

Mixed taxable persons have a limited right to deduct VAT because they carry out both VAT-taxable and VAT-exempt transactions. The restriction can be applied in two ways: on the basis of a general ratio or on the basis of actual use.

The general pro rata

Under the general pro rata method, you restrict the right of deduction based on the ratio between turnover attributable to your VAT-taxable transactions and your total turnover. You then apply that ratio to all your costs.

The actual-use method

Under the actual-use method, the restriction is based on the actual allocation of the costs. Costs attributable to VAT-taxable transactions are fully deductible, while costs attributable to exempt transactions are not deductible. For mixed costs, such as accounting or ICT costs, a special pro rata is applied by analogy with the general pro rata described above.

The general pro rata is turnover-based, whereas the actual-use method is cost-based.

Which method is best for you? That depends on your specific situation and, more particularly, on the relationship between your cost structure and your turnover structure.
If your costs for both types of turnover are similar but your VAT-taxable turnover is high, the general pro rata method may be more beneficial.
If the costs relating to your exempt activity are significantly lower than those relating to your VAT-taxable activity, the actual-use method may be more beneficial.

Contact PKF BOFIDI and let us assess this for you based on your accounts!

Another way to save VAT-related cash flow is relevant where many internal transactions take place within a group. Consider a group in which company A purchases raw materials and resells them with VAT to sister company B, which then uses them for roadworks. Because B, as a contractor, mainly invoices its outgoing transactions under the reverse-charge mechanism, it is often in a VAT refund position. The VAT that B pays to A on the raw materials is remitted by A to the State, while B can recover that VAT only at a later stage. As a result, cash flows unnecessarily out of the group to the State, even though those funds could temporarily have been used elsewhere within the group.

If B is a quarterly filer, the impact is even greater: the pre-financing to the State can amount to as much as six months, even though the funds belong to the same group.

In such a situation, a VAT group prevents pre-financing to the State because internal transactions between A and B, where both are members of the VAT group, fall outside the scope of VAT.

Naturally, certain conditions apply. Contact us and we will be pleased to assess this further.