Key takeaways
- A deposit invoice requests a partial payment before the delivery or the service; the balance is settled later through a final settlement invoice.
- In Belgium, VAT on a deposit becomes chargeable when the deposit is received, up to the amount received (art. 22bis and 17 of the VAT Code).
- Issuing the invoice has, since 1 January 2016, been a cause of VAT chargeability in its own right.
- The final settlement shows the full price and deducts the deposits already invoiced, so the total VAT matches the full price.
Asking for an advance payment protects your cash flow on a large order or a project that runs over time. In Belgium, as soon as a deposit is received between taxable persons, the corresponding VAT becomes due: it is not a mere receipt, it is a transaction to document. The deposit invoice is the document that fills this role, before the final settlement closes the deal.
This article explains when to issue a deposit invoice, how VAT works on an advance payment, which details it must carry, and how to move cleanly to the balance invoice.
The deposit invoice: requesting payment before delivery
A deposit invoice is an invoice covering part of the agreed price, requested or received before the goods are delivered or the service is performed. It typically comes when an order is signed, a project starts or a site opens, when the supplier wants to cover its first costs without waiting for the operation to finish.
It is not a final invoice: it does not settle the relationship. It signals that a balance will follow, calculated on the full price, once the operation is complete. Its function is twofold: to frame the advance payment legally and to trigger the VAT treatment at the right moment.
When VAT becomes chargeable on a deposit
For VAT purposes, two notions differ. The chargeable event is the moment the transaction takes place: the delivery of the goods or the completion of the service. Chargeability is the moment the Treasury may claim the tax. The two do not always coincide, and it is precisely this gap that a deposit brings into play.
When the price is received, in whole or in part, before the chargeable event, the tax becomes chargeable at the moment it is received, up to the amount received (art. 22bis of the VAT Code for services, art. 17 for goods). In other words, receiving a deposit makes VAT due on that deposit alone, straight away, without waiting for delivery.
What makes VAT chargeable on a deposit
Receipt of the deposit
VAT becomes chargeable up to the amount received, at the moment the money comes in.
Issuing the invoice
Since 1 January 2016, issuing the invoice is once again a cause of chargeability between taxable persons.
The 15th day of the following month
Failing an invoice, the tax is chargeable in any case at the latest on the 15th day of the month following the chargeable event.
The invoice must be issued at the latest on the 15th day of the month following the one in which the tax became chargeable, which for a deposit is the month it is received. This deadline is set by Royal Decree No. 1 (art. 4) and administered by FPS Finance, and applies to the deposit invoice like any other invoice.
The mandatory details of a deposit invoice
A deposit invoice is a full invoice: it carries all the mandatory details required by Belgian rules. Its only specificity is that it must state its object clearly: a deposit on a future transaction, not a total price.
What the deposit invoice must contain
The full identity of both parties
Name, address and VAT number of the supplier and of the taxable customer.
The date and a sequential number
The issue date and a unique number in a continuous series.
The nature of the transaction
The description of the future order and an explicit mention that it is a deposit.
The VAT breakdown of the deposit
The amount excluding VAT, the applicable rate, the VAT amount and the total to pay.
The VAT rate applied to the deposit is the rate of the future transaction. For the general rules, see our guide to the mandatory details of an invoice in Belgium.
From the first deposit to the final settlement
The overall logic is a chain: order, deposit, delivery, balance. Each deposit received is invoiced with its VAT; at the end, a final invoice shows the total price and deducts what has already been accounted for. The final settlement therefore shows only the outstanding balance.
- 1
Order or accepted quote
Step 1The total price and payment terms are agreed with the customer.
- 2
Deposit invoice
Step 2An invoice covers a fraction of the price; VAT becomes chargeable on receipt.
- 3
Delivery or service
Step 3The transaction takes place: this is the chargeable event.
- 4
Balance invoice (final settlement)
Step 4It shows the total, deducts the deposits already invoiced and displays the balance.
A simple example. For an order of 3,000 EUR excluding VAT at a 21% rate, a deposit of 30% gives a deposit invoice of 900 EUR excluding VAT, that is 189 EUR of VAT and 1,089 EUR to pay. On delivery, the balance invoice shows the 3,000 EUR excluding VAT, deducts the 900 EUR already invoiced, and therefore covers 2,100 EUR excluding VAT plus 441 EUR of VAT. In total, the VAT invoiced (189 EUR then 441 EUR) comes to exactly 630 EUR, that is 21% of 3,000 EUR.
| Deposit invoice | Balance invoice | |
|---|---|---|
| Covers part of the price | ||
| Shows the full price of the transaction | ||
| Deducts amounts already invoiced | ||
| Makes part of the VAT chargeable |
This symmetry is the key to accurate bookkeeping: what you have already invoiced as a deposit must never be re-invoiced in the balance, or the taxable base is doubled.
Invoice your deposits and balances without a VAT slip
YouInv issues your deposit invoices and final settlements, applies the right rate and keeps track of the amounts already invoiced.
What it changes for your admin
A deposit is not an administrative detail: it is a VAT trigger. As soon as it is received, the tax is due and must be reported in the relevant period. Invoicing software that manages the deposit-balance chain saves you two classic mistakes: forgetting the VAT on a received deposit, or invoicing it twice at the balance stage.
Handled well, the deposit becomes a healthy cash-flow tool with no risk of reassessment. The final settlement is no longer a source of accounting anxiety, but simply the close of a transaction already tracked step by step.
Further reading
- The mandatory details of an invoice in Belgium: the baseline that applies to every invoice, deposits included.
- The periodic VAT return in Belgium: where and when to report VAT that has become chargeable.
- The electronic credit note: correcting an invoice already issued, deposit or balance.
The reference source prevails: the Accounting and invoicing page of FPS Finance.
What is a deposit invoice?
A deposit invoice is an invoice issued to request or record a partial payment before the goods are delivered or the service is performed. It covers a fraction of the agreed price, not the whole, and is followed by a final settlement invoice that shows the total and deducts the deposits already invoiced.
When is VAT chargeable on an advance payment in Belgium?
When a deposit is received before the delivery or the service, VAT becomes chargeable at the moment it is received, up to the amount received (art. 22bis for services and art. 17 for goods, of the Belgian VAT Code). Issuing the invoice is also a cause of chargeability, reinstated on 1 January 2016. Failing an invoice, the tax is in any case chargeable at the latest on the 15th day of the month following the chargeable event.
Is a deposit invoice mandatory?
Asking for a deposit is a commercial choice, not an obligation. But as soon as a deposit is received or an invoice is issued between taxable persons, the transaction must be documented by an invoice at the latest on the 15th day of the month following receipt, with the corresponding VAT.
How do you draw up the final settlement after deposits?
The final invoice shows the total amount of the transaction, then deducts the deposits already invoiced and the VAT already accounted for, leaving only the outstanding balance. The total VAT invoiced across deposits plus balance must equal the VAT due on the full price.
What details must a deposit invoice contain?
It carries the mandatory details of any invoice (identity of the parties, VAT numbers, date, sequential number, VAT rate and amount) and states clearly that it is a deposit on a future order, showing the amount excluding VAT, the VAT and the total of the deposit.
