The government has noted that many health care institutions in Belgium are faced with certain shortages of goods in the context of the fight against the Coronavirus, while other taxpayers are prepared to donate available stocks of those goods to those institutions. However, the levying of VAT on this diversion may be an obstacle to such donations while identifying potential and real needs.
Which goods are concerned?
- Medical devices and their accessories as referred to in the Royal Decree of 18.03.1999 on medical devices. Such as e.g.
- any instrument, device, software or substance or any other article used alone or in combination, including the software specifically intended by the manufacturer to be used for diagnostic and/or therapeutic purposes and required for its proper functioning, intended by the manufacturer to be used in human beings for diagnosis, prevention, monitoring, treatment or alleviation of disease;
- devices intended for clinical research;
- any medical device which is a reagent, reagent product, calibrator, control material, kit, instrument, device, appliance or system, whether used alone or in combination, intended by the manufacturer to be used in vitro for the examination of specimens, including donated blood and tissue, derived from the human body, solely or principally for the purpose of providing information.
- Protective equipment for carers and patients (mouth masks, protective clothing, soaps and grips, ...)
To whom can these goods be donated?
Health care institutions referred to in the Coordinated Law of 10.07.2008 on hospitals and other care institutions.
By extension, the associations of hospitals, hospital groups and mergers of hospitals are also meant. In addition, also referred to are the locoregional clinical hospital networks.
Who can donate goods?
In the first place, those liable to pay VAT who have purchased or produced the goods, where a right to full or partial deduction of VAT has arisen in respect of the goods or their component parts.
What VAT obligations must the donor comply with?
As proof that the taxpayer-donor has donated the goods in question free of charge, in principle, a duplicate document must be drawn up for each donation made, in which the care institution confirms that the goods in question were obtained free of charge and undertakes either to use the goods in question for the provision of care itself or to make them available free of charge to another care institution.
The document contains at least the following information for each donation:
- the date;
- the (corporate) name, address and VAT identification number of the taxable donor;
- the (corporate) name, address and company number of the beneficiary of the donation;
- a complete and correct description of the donated goods; the administration has granted a tolerance for this, i.e. the grouping of donations and the addition of the cash register or the scanning list.
- an indication of the quantity of goods.
Furthermore, the administration accepts that, if desired, a single collection document will be drawn up by the fifteenth day of each month at the latest, in which all donations of the relevant products of the previous month are included.
The administration accepts that, in the given circumstances, an entry of this document in the accounts of the taxpayer donor is also not required.
2. Corporate tax
It is assumed that the donor has not received any benefit for himself and that the goods donated accrue exclusively to the beneficiary institutions. In this case, the donated goods will not be considered as granted abnormal or gratuitous advantages. Moreover, the costs associated with the goods donated are, in principle, tax deductible. The measures referred to above only apply if all the conditions relating to VAT are met.
3. Personal income tax
For self-employed persons, the same rules apply as for companies, the donated goods are not considered as an abnormal benefit and the costs related to the donated goods are in principle tax deductible.
Tax relief for donations in kind
What does the measure consist of?
The Minister of Finance has decided, on an exceptional and temporary basis, to allow donations in kind to specific institutions to benefit from the tax relief for donations.This is a tax reduction for donations in kind to specific institutions with a value of at least EUR 40 (indexed amount).
The tax reduction is equal to 45 % of the value of the donations in kind actually made.
To whom does the measure apply?
This tax reduction applies to taxpayers, natural persons subject to personal income tax and, in specific cases, to non-residents/natural persons (1) who make gifts in kind to specific institutions.
For which institutions?
Donations in kind must be made exclusively to Belgian university hospitals or CPAS hospitals. These hospitals are authorised to issue tax certificates for the donations they receive.
Which donations are involved?
These are donations consisting of all kinds of medical materials and products used in the fight against the Coronavirus and which are considered as such by the hospitals.
For example (not a restrictive list): mouth masks, disinfectants, test sets for the Coronavirus, respirators, protective clothing, etc.
How is the value of donations determined?
The value of donations in kind is determined:
- either on the basis of an invoice for the purchase of the donated medical equipment or medical products. This invoice must be submitted by the donor to the hospital,
- or, in the absence of a purchase invoice, on the basis of an estimate of the value of the donated material by the hospital receiving the donation. This estimate is based on the market value of the donated goods.
The hospitals draw up the certificates necessary to allow the taxpayer to claim the tax reduction within the framework of his income tax return (assessment year 2021 - income of 2020). They send these certificates to the tax authorities in accordance with the appropriate procedures.
4. Temporary measure
This measure, taken in the context of the fight against the Coronavirus, applies to donations in kind and donations of goods made between 01.03.2020 and 30.06.2020