Business Central Belgium: Non-Deductible VAT Migration to VAT Posting Groups

According to Microsoft's AI at Work Roadmap (ID 576751), Microsoft is developing an update titled Dynamics 365 Business Central: Country and regional - Start using the new non-deductible VAT framework in Belgium. Rather than relying on an isolated, country-specific setup buried inside individual general ledger accounts, Belgian tenants will transition to Business Central's standard global non-deductible VAT framework, augmented by a preconfigured Non-deductible VAT Type field tailored specifically for Belgium.

For administrators, consultants, and finance leads managing Belgian environments on the Worldwide (Standard Multi-Tenant) cloud, this isn't a change in Belgian tax law—it is a significant shift in where tax rules live inside your database. Here is a breakdown of how the legacy Belgian workflow operates, what the new framework changes, why Microsoft's release dates are currently showing a bit of administrative turbulence, and how your team should prepare.

The Legacy Belgian Approach: Tied to the Chart of Accounts​

To understand why Microsoft is overhauling this process, you have to look at how Business Central has historically handled partially deductible expenses in Belgium. In Belgian accounting, VAT on certain business expenses—such as representation costs or company car purchases—is only partially recoverable, while the non-deductible portion must be treated as an additional cost.

According to Microsoft Learn's Belgian localization documentation, the existing method requires administrators or accountants to configure non-deductible percentages directly on individual expense accounts:

1. Users navigate to the Chart of Accounts and open a specific general ledger (G/L) expense account card.
2. In the % Non deductible VAT field, they manually enter the non-deductible portion. (If left blank, Business Central treats the VAT as 100 percent deductible.)
3. For example, if an accountant enters 75 in the % Non deductible VAT field, 75 percent of the regular VAT amount is treated as an additional cost and added to the net expense amount during posting, while the remaining 25 percent posts as regular recoverable VAT.

While straightforward for simple expenses, this account-level approach creates extra administrative overhead when dealing with capital equipment. As noted in Microsoft Learn's Belgian VAT documentation, non-deductible VAT on a fixed asset depreciates right alongside the base acquisition cost of the asset. Because the percentage is tied to the G/L account, Belgian businesses must set up separate fixed asset posting groups for every single percentage of non-deductible VAT they encounter, linking each posting group to its respective G/L account.

Summary: Legacy Workflow​

• Configuration location: Chart of Accounts (individual G/L Account Cards).
• Control field: % Non deductible VAT.
• Pain point: Requires separate G/L accounts and separate Fixed Asset Posting Groups for each distinct non-deductible VAT percentage.

The New Global Framework: Moving to VAT Posting Group Setup​

When Microsoft introduced a standardized, worldwide non-deductible VAT feature in the 2023 release wave 1 of Business Central, it initially bypassed countries that already had deeply entrenched local implementations—specifically Belgium, Italy, and Norway—with plans to deprecate the local solutions and migrate them to the global architecture later.

Roadmap item 576751 represents that transition for Belgium. Under the upcoming design:

• Centralized VAT Setup: Instead of selecting a G/L expense account in the Chart of Accounts and manually entering the partial deduction on the account card, users will manage non-deductible rules through the VAT Posting Group Setup.
• Belgium-Specific Field: A preconfigured Non-deductible VAT Type field will be provided specifically for the Belgian localization to bridge local compliance needs with the standard global method.
• Automatic Data Upgrade: When an administrator enables the new capability on the VAT Setup page, Business Central will automatically trigger a data upgrade to transition the environment.

Note that Microsoft's roadmap description focuses strictly on the setup and calculation framework migration; it does not state whether existing Belgian VAT statement reporting options—such as the Incl. Non Deductible VAT line setting or how the Calc. and Post VAT Settlement report populates the Non Ded. VAT Amount and Non Ded. Source Curr. VAT Amt. fields—will change, nor does it detail the exact table-level mechanics of the automatic data upgrade.

Summary: New Workflow​

• Configuration location: VAT Setup and VAT Posting Group Setup.
• Key addition: A preconfigured Non-deductible VAT Type field for Belgium.
• Migration mechanism: Enabling the feature in VAT Setup runs an automatic data upgrade.

Rollout Timeline: Navigating Conflicting Microsoft Schedules​

If you are trying to pin down the exact date this feature lands in your tenant, you might notice that Microsoft's own tracking systems don't quite agree with one another. Why the discrepancy? We are currently witnessing a handover in how Microsoft publishes Dynamics 365 schedules.

According to Microsoft Learn, formal Dynamics 365 Release Plans stopped being published starting in September 2026, with new Dynamics 365, Power Platform, and Dataverse disclosures moving to the unified AI at Work Roadmap. Because of this transition, two different schedules appear in Microsoft's records:

• The AI at Work Roadmap (ID 576751): Published in October 2026, this entry lists the feature status as In development, targeting a Preview in November 2026 and General Availability in February 2027 for the Web platform in Worldwide (Standard Multi-Tenant) cloud instances. It also specifies that the feature is enabled by admins, makers, or marketers for end users.
• Archived 2026 Release Wave 1 Plan: Microsoft's earlier release plan documentation (which Microsoft Learn now flags as archived and no longer maintained as of October 2026) previously projected this capability under the 2026 Wave 1 cycle.

Because Microsoft explicitly notes that archived release plans may not reflect current product plans and that roadmap dates are estimated targets subject to change, administrators should treat November 2026 (Preview) and February 2027 (General Availability) as the active planning horizon, while watching the Business Central admin center and official Belgian documentation for confirmation that the build has actually deployed.

Practical Guidance: How Belgian Admins Should Prepare​

Whenever an ERP platform offers an "automatic data upgrade" tied to a toggle switch in a setup page, veteran system administrators know that preparation is everything. Based on general industry best practices and Microsoft's existing documentation for the global non-deductible VAT engine, there are several practical precautions your team should take before flipping the switch in production:

1. Do Not Prematurely Enable Generic Global VAT Settings: Microsoft Learn's global setup documentation explicitly notes that the standard global feature was built for VAT-enabled countries except Belgium, Italy, and Norway. Wait until the Belgian-specific update—complete with the Non-deductible VAT Type field and the official Belgian migration routine—is confirmed live in your environment.
2. Inventory Your Chart of Accounts: Before the update arrives, export or filter your Belgian Chart of Accounts to identify every G/L expense account that currently contains a value in the % Non deductible VAT field. Document these percentages alongside the Fixed Asset Posting Groups that rely on them.
3. Test the Automatic Data Upgrade in a Sandbox First: In Business Central's global non-deductible VAT documentation, Microsoft warns that enabling the feature alters underlying data and cannot simply be switched off once activated. When the November 2026 preview arrives, copy your production company into a sandbox environment, enable the feature in VAT Setup, and verify how the automatic data upgrade maps your legacy G/L account percentages into the new VAT Posting Group Setup.
4. Verify Custom Extensions and Reporting: If your organization uses Per-Tenant Extensions (PTEs) or custom Power BI financial reports that read the legacy % Non deductible VAT field directly from the G/L Account table, alert your AL developers now so they can refactor their code to reference the VAT Posting Group Setup tables instead.

Summary: Admin Action Plan​

• Audit current G/L accounts using % Non deductible VAT and linked Fixed Asset Posting Groups.
• Wait for the official November 2026 preview rather than attempting workarounds.
• Run the VAT Setup automatic data upgrade in a sandbox environment and validate VAT statements and fixed asset depreciation postings before touching production.