By judgment of 10 September 2026 (Dutch | French), the Belgian Council of State annulled Circular 2024/C/80 of 11 December 2024, which had restricted VAT refunds for credit insurers.
Background
Belgian VAT law provides for a refund where all or part of a supplier’s receivable becomes irrecoverable. In principle, the refund is granted to the person who paid the VAT to the State. Since 2007, however, the tax authorities had also permitted credit insurers to claim a VAT refund after indemnifying the supplier, as policyholder, and being subrogated to the policyholder’s rights. By virtue of that subrogation, the insurer could exercise the refund rights available to the policyholder.
Following the judgment of the Court of Justice of the European Union of 9 February 2023 in the Euler Hermes case (C-482/21), the Belgian tax authorities issued Circular 2024/C/80 on 11 December 2024. With effect from 1 January 2025, the circular restricted the circumstances in which credit insurers could claim a VAT refund.
First, it provided that only the taxable person that had entered into the credit insurance contract was entitled to exercise the right to a refund of VAT previously paid to the Belgian tax authorities but not received from its debtor.
Secondly, it limited the amount of the VAT refund. Relying on the principle of fiscal neutrality, the Belgian tax authorities maintained that the refundable VAT had to be exactly proportionate to the consideration actually received by the taxable person that had entered into the insurance contract. Accordingly, the refund was limited to the VAT included in the portion of the receivable that had not been reimbursed by the credit insurer.
Circular lacked a legal basis
The Council of State annulled the 2024 circular on the ground that the General Administration of Taxation of the Federal Public Service Finance lacked the legal authority and mandate to issue it.
Conclusion
The Circular has been annulled with retroactive effect and is therefore deemed never to have entered into force. Credit insurers should consequently reassess their VAT refund procedures and, where appropriate, their contractual arrangements, and determine to which extent they can rely on the former refund rules that were repealed by the 2024 Circular.
Authors:
- Danny Stas, Partner, Tax Advisory | Indirect Tax (VAT) | Real Estate at Deloitte Legal
- Joaquim Heirman, Director, Tax Advisory | Indirect Tax (VAT) | Real Estate at Deloitte Legal
