The credit note, commonly known as an "avoir" in everyday language, is an essential accounting document for every Belgian entrepreneur. It lets you correct an incorrect invoice, cancel a transaction or grant a commercial discount after invoicing. In Belgium, issuing a credit note is strictly governed by the VAT Code and Royal Decree No. 1, and failing to comply can lead to tax penalties. This guide explains everything you need to know to issue compliant credit notes in 2026.
What Is a Credit Note?
Legal Definition
A credit note is an accounting document issued by the supplier (seller or service provider) to correct or cancel all or part of a previously issued invoice. Under Belgian VAT law, it is covered by Article 77 of the VAT Code (CTVA), which provides for the refund or adjustment of VAT when the taxable base is reduced after the tax has become due.
Royal Decree No. 1 of 29 December 1992 (Articles 4 and 5) sets out the formal conditions this document must meet.
Credit Note vs Corrective Invoice
It is important to distinguish between these two concepts:
| Document | Use | Effect |
|---|---|---|
| Credit note | Price reduction, cancellation, return of goods | Reduces the amount due and the VAT payable |
| Corrective invoice | Correction of a factual error (address, VAT number, description) | Replaces the incorrect invoice with no impact on the amount |
In practice, one is used whenever the amount of the original invoice must be reduced. A corrective invoice is used for purely formal corrections.
When to Issue a Credit Note
1. Return of Goods
When a customer returns goods (defective product, non-compliant with the order, right of withdrawal), the supplier must issue a credit note to cancel the corresponding invoice.
Example: an online retailer in Brussels sells a piece of furniture for EUR 500 excl. VAT plus EUR 105 VAT (21%). The customer exercises their right of withdrawal within 14 days (Article VI.47 of the Code of Economic Law). The seller issues a credit note for EUR 605 incl. VAT.
2. Price Reduction After Invoicing (Discount, Rebate, Refund)
Price reductions granted after the original invoice require a credit note:
- Rebate: reduction granted for a quality defect or non-conformity
- Discount: reduction linked to purchase volume or customer loyalty
- Refund/rebate on turnover: reduction calculated on total purchases over a period (usually annual)
- Cash discount: reduction for early payment (before the due date)
Example: an office supplies company in Antwerp grants an annual rebate of 5% to a customer who purchased EUR 50,000 excl. VAT worth of goods over the year. It amounts to EUR 2,500 excl. VAT plus EUR 525 VAT (21%) = EUR 3,025 incl. VAT.
3. Cancellation of the Sale or Service
If the sale or service is cancelled after invoicing (contract termination, cancelled order), a credit note must be issued for the full amount.
4. Invoicing Error on the Amount
If an invoice contains an error in the price (amount too high, incorrect quantity), a credit note corrects the over-invoiced amount.
Note: if the invoiced amount is too low, you must issue a supplementary invoice, not a credit note.
5. Irrecoverable Debt
When a customer fails to pay and the debt is definitively lost (bankruptcy, established insolvency, time-barring), the supplier can issue a credit note to recover the VAT paid to the Treasury. Article 77, §1, 7° of the VAT Code provides for this possibility.
Conditions for irrecoverable debts:
- The loss must be definitive (not simply a payment difficulty)
- The supplier must have taken debt-recovery steps (reminders, formal notice, legal proceedings)
- In the event of bankruptcy, the proof of claim filed with the receiver constitutes sufficient evidence
- It must be issued and included in the VAT return
6. Incorrect VAT Rate Applied
If an incorrect VAT rate was applied (e.g. 21% instead of 6% for renovation work on a building over 10 years old), a credit note must be issued to correct the error, followed by a new invoice at the correct rate.
Mandatory Details on a Credit Note
Royal Decree No. 1 (Article 4) requires a credit note to contain the following details:
Details Identical to an Invoice
- Date of issue
- Sequential and unique number (in a separate numbering sequence, or in the same sequence as your invoices, depending on your system)
- Supplier identification: name/company name, address, VAT number (BE 0XXX.XXX.XXX)
- Customer identification: name/company name, address, VAT number (if the customer is a taxable person)
- Description of the goods or services concerned
- Amount of the reduction or cancellation (excl. VAT, VAT, incl. VAT)
- Applicable VAT rate
Details Specific to the Credit Note
- The words "Credit Note", clearly and visibly stated
- Reference to the original invoice: number and date of the invoice being corrected or cancelled
- The reason for issuing it (return, rebate, cancellation, error, etc.)
- The specific VAT mention: "VAT to be repaid to the State by the customer to the extent it was originally deducted — Art. 77, §1 of the VAT Code"
This last mention is essential: it informs the customer (if they are a taxable person) that they must repay the VAT they had originally deducted on the original invoice.
VAT Treatment of the Credit Note
For the Supplier (Issuer of the Credit Note)
The supplier can recover the VAT they had paid on the original invoice. It is included in the periodic VAT return as follows:
| VAT Return Box | Content |
|---|---|
| Box 49 | Amount excl. VAT of credit notes issued (as a negative in turnover) |
| Box 64 | VAT to be recovered (adjustment in the filer's favour) |
For the Customer (Recipient of the Credit Note)
If the customer is a taxable person and had deducted VAT on the original invoice, they must repay this VAT to the Treasury:
| VAT Return Box | Content |
|---|---|
| Box 84 or 85 | Amount excl. VAT of the credit note received (reduction in purchases) |
| Box 63 | VAT to be repaid (adjustment against the filer) |
Deadline for Issuing a Credit Note
There is no strict legal deadline for issuing a credit note under Belgian VAT law. However, several practical considerations apply:
- Accounting period: it is recommended to issue it in the same accounting period as the original invoice, where possible
- VAT correction deadline: Article 77, §2 of the VAT Code provides a 3-year period to request the refund of VAT
- Best practice: issue it as soon as the triggering event occurs (return of goods, agreement on a rebate, etc.)
Concrete Examples of Credit Notes
Example 1: Credit Note for a Return of Goods
CREDIT NOTE NO. NC-2026-018
Date: 22 March 2026
FROM:
TechShop SRL
Boulevard Anspach 55, 1000 Brussels
VAT: BE 0567.890.123
TO:
Bureau Plus SPRL
Rue Neuve 112, 4000 Liège
VAT: BE 0345.678.901
Reference: Invoice No. F-2026-042 of 05/03/2026
Reason: Return of defective goods
DESCRIPTION QTY UNIT PRICE TOTAL EXCL. VAT
------------------------------------------------------------
27" LED monitor - ref. MON-27X 2 350.00 700.00
Wireless keyboard - ref. KB-90 3 45.00 135.00
------------------------------------------------------------
TOTAL EXCL. VAT 835.00
VAT 21% 175.35
TOTAL INCL. VAT 1,010.35
The amount of EUR 1,010.35 will be deducted from your next
invoice / refunded by bank transfer within 14 days.
VAT to be repaid to the State by the customer to the extent
it was originally deducted - Art. 77, §1 of the VAT Code.
Example 2: Credit Note for an Annual Rebate
CREDIT NOTE NO. NC-2026-003
Date: 15 January 2026
FROM:
Fournitures Pro SA
Chaussée de Louvain 200, 1000 Brussels
VAT: BE 0789.012.345
TO:
Agence Creative SRL
Place du Grand Sablon 18, 1000 Brussels
VAT: BE 0234.567.890
Reference: Invoices from 01/01/2025 to 31/12/2025
Reason: Contractual annual rebate of 3%
Total 2025 purchases (excl. VAT): 42,000.00 EUR
3% rebate: 1,260.00 EUR
TOTAL EXCL. VAT 1,260.00
VAT 21% 264.60
TOTAL INCL. VAT 1,524.60
VAT to be repaid to the State by the customer to the extent
it was originally deducted - Art. 77, §1 of the VAT Code.
Example 3: Credit Note for an Irrecoverable Debt
CREDIT NOTE NO. NC-2026-025
Date: 20 March 2026
Reference: Invoice No. F-2024-156 of 10/09/2024
Reason: Irrecoverable debt - Customer bankruptcy
(Judgment of the Brussels Enterprise Court
of 15/02/2026 - Proof of claim filed
on 01/03/2026)
Original invoice amount:
Excl. VAT: 8,500.00
VAT 21%: 1,785.00
Incl. VAT: 10,285.00
Full credit note:
Excl. VAT: 8,500.00
VAT 21%: 1,785.00
Incl. VAT: 10,285.00
Credit Notes and Electronic Invoicing (Peppol)
The Context in 2026
Since 1 January 2026, structured electronic invoicing via the Peppol network has been mandatory for B2B transactions between VAT-registered businesses established in Belgium (Law of 6 February 2024). This obligation extends to credit notes.
Format of the Electronic Credit Note
The electronic credit note must be issued in the Peppol BIS Credit Note 3.0 format (based on the UBL 2.1 standard). This format includes:
- A specific document identifier (CreditNote instead of Invoice)
- A reference to the original invoice (BillingReference field)
- Amounts shown as negative or marked as a credit
- The same VAT identifiers as the invoice
Peppol Access Points in Belgium
To send and receive electronic credit notes, you must be connected to the Peppol network via a certified access point. Active access points in Belgium include:
- Hermes (the FPS Finance platform)
- Billtobox (a Belgian solution)
- Basware
- Unifiedpost
- CodaBox
Common Mistakes and How to Avoid Them
1. Issuing a Credit Note Without Referencing the Original Invoice
Consequence: it may be rejected by the VAT authorities, and the VAT recovery refused.
Solution: always state the number and date of the original invoice.
2. Forgetting the Mandatory VAT Mention (Art. 77)
Consequence: the customer is not informed of their obligation to repay the VAT, which can lead to adjustments and fines.
Solution: systematically include the mention relating to Article 77, §1 of the VAT Code.
3. Issuing a Credit Note for a Higher Amount Than the Original Invoice
Consequence: this creates an accounting anomaly that will draw attention during a tax audit.
Solution: if the customer is owed an amount higher than the original invoice (e.g. compensation), use a separate document.
4. Not Adjusting the VAT Return
Consequence: the VAT recovered on it will not be accounted for, resulting in a VAT overpayment or over-collection.
Solution: systematically include credit notes in the VAT return for the relevant period.
5. Using a Credit Note to Conceal Turnover
Consequence: this constitutes tax fraud, punishable under criminal law (Art. 449 of the Income Tax Code 1992). The ISI (Special Tax Inspectorate) pays particular attention to fictitious or suspicious ones.
Solution: only issue one for a real, documentable reason.
6. Confusing a Credit Note with a Debit Note
| Document | Issuer | Effect |
|---|---|---|
| Credit note | The supplier | Reduces the amount owed by the customer |
| Debit note | The customer (in certain cases) or the supplier | Increases the amount owed by the customer |
In Belgium, debit notes are less common. They are used, for example, to bill late-payment interest or additional charges.
Accounting for Credit Notes
In the Supplier's Accounts
The credit note is recorded as follows (Belgian standard chart of accounts, MAR):
| Account | Description | Debit | Credit |
|---|---|---|---|
| 700 | Sales and services rendered | X | |
| 411 | VAT to be recovered | X | |
| 400 | Customers | X |
In the Customer's Accounts
| Account | Description | Debit | Credit |
|---|---|---|---|
| 400 | Suppliers | X | |
| 604 | Purchases of goods / services | X | |
| 411 | VAT payable | X |
Credit Notes and the VAT Exemption Scheme
If you are under the VAT exemption scheme (Art. 56bis of the VAT Code, turnover below EUR 25,000), your credit notes do not show VAT, just like your invoices. It must still include:
- The mention "Small business subject to the tax exemption scheme"
- The reference to the original invoice
- The reason for issuing it
- The amount (with no VAT breakdown)
Impact on the Periodic VAT Return
Reporting in the Monthly or Quarterly Return
Credit notes issued and received must be correctly reported in the VAT return:
Credit notes issued (you are the supplier):
- Box 49: taxable base of credit notes issued
- Box 64: VAT adjusted in your favour
Credit notes received (you are the customer):
- Box 84/85: taxable base of credit notes received (reduction in purchases)
- Box 63: VAT adjusted against you (VAT to be repaid)
Annual Listing of Taxable Customers
Credit notes are taken into account in the annual listing of taxable customers (Art. 53quinquies of the VAT Code). The turnover per customer is stated net of them. If the net total for a customer is negative, it is stated as zero.
Conclusion
The credit note is an indispensable tool for commercial and accounting management in Belgium. Whether correcting an error, granting a rebate or adjusting for an irrecoverable debt, it must be issued in strict compliance with the rules of the VAT Code and Royal Decree No. 1.
In 2026, with mandatory B2B electronic invoicing via Peppol, credit notes must also be issued in structured electronic format. Make sure your invoicing software correctly handles them electronically and automatically includes them in your VAT returns.
Never forget the three key elements: the reference to the original invoice, the reason for issuing it, and the VAT mention relating to Article 77 of the VAT Code.
This article was written by the Espero-Soft team for the blog dedicated to entrepreneurs in Belgium. For personalised advice, consult an ITAA-approved accountant.
