1. VAT in Europe
3. VAT in Belgium
5. Reverse charge in Belgium

Reverse charge in Belgium

Reverse charge for non-established suppliers in Belgium

According to art 194 of the VAT Directive, Member States may implement an optional reverse charge on supplies made by non-established businesses.

Belgium has introduced an extended version of this regime. Where a non-established supplier sells goods or services (only services within the B2B exception) to a client established in Belgium or registered via a Belgian fiscal representative, domestic reverse charge applies. It is not relevant if the supplier is registered or not. Regarding the customer, it must have a permanent establishment or be registered via fiscal representative. If the customer is registered directly for VAT purposes, reverse charge does not apply. Regarding the reference on the invoice, supplies falling under the reverse charge mechanism can include the following wording: "Autoliquidation – Art 51 § 2, 5°"

• Supplier requirements
  Not established in Belgium (irrelevant if the supplier is registered or not for VAT)
• Customer requirements
  Taxable person with a permanent establishment in Belgium; or registered via fiscal representative
• Scope
  All supplies of goods Supplies of services located in Belgium (exceptions to the B2B rule)

Reverse charge in B2B services in Belgium

Article 196 of the VAT Directive requires the reverse charge mechanism on all services subject to the B2B rule introduced in art. 44 of the same Directive. The B2B rule locates the transaction where the business customer is located. In case the customer is a private individual, B2C rules locate the transaction where the supplier is located. According to the general B2B rule, any business not established in Belgium supplying services to a Belgian registered customer will not charge any VAT and the transaction will be reverse charged by the customer. There are however a number of exceptions to this rule. Where these exceptions apply, reverse charge is still applicable in Belgium:

• Services connected to immoveable property are located where the property is located
• Passenger transport services will be located where the transport takes places (apportioned if necessary)
• Catering services are located where the catering takes place
• Short term leasing of means of transport are located where the vehicle put at the disposal of the customer
• Access to conferences, fairs and exhibitions is located where the event takes place

Belgian reverse charge on specific goods and services

Domestic reverse charge may also apply on certain goods with different conditions in each case. This regime is often introduced on supplies of goods or services that are more likely to be used for carousel fraud purposes. In this case, it applies to:

• Supplies of construction work, as well as the supply of staff engaged in the construction work.
• Supplies of gold products of a purity higher than 32.5% and investment gold.
• Transfer of CO2 emission allowances only provided that the customer has a Belgian VAT number and submits periodic VAT returns.

You can find here the Royal Decree 1, Articles 20 to 20ter regulate the VAT reverse charge mechanism on specific supplies of goods and services. Also here the section from the Belgian VAT Code about tax liability and reverse charge – Article 51.

Construction work

From 1 January 2023, when a Belgian established company performs construction supplies on immovable property, reverse charge will always apply provided that the customer has a Belgian VAT number and submits periodic VAT returns. The follwoing conditions apply:

• This domestic reverse charge does not apply in case the customer provides a Belgian VAT number but is not obliged to submit periodic VAT returns. However, if the customer has not informed the supplier whether or not he must submit VAT returns, the supplier must include a statement on the invoice indicating that the customer has a period of 1 month to contest the invoice in writing. Once this period is expired with no further clarification, then the customer is liable for the payment of the tax and any applicable penalty.
• The specific wording to add in the invoice is: ‘Reverse charge. In the absence of a written dispute within a period of one month from the receipt of the invoice, the customer is deemed to acknowledge that he is a taxable person liable to submit periodic returns. If that condition is not fulfilled, the customer is liable for payment of the tax, interests and fines due in respect of that condition (new Art 20, §3 RD No 1)’. 
• This reverse charge in construction services applies also when the customer is a non-establish company VAT registered in Belgium, and it is irrelevant if this is a direct registration or via a fiscal representative. In the past, it would only apply to these foreign companies when registered via a fiscal representative in Belgium. Find here the VAT news published in our website.

Therefore, the VAT registration of the customer is not mandatory in case of performing local purchases of construction work because the customer must be previously registered for VAT to apply reverse charge.

• Supplier requirements
  N/a
• Customer requirements
  Customer has a Belgian VAT number and submits periodic VAT returns (irrelevant if established or not established).
• Scope
  All supplies of construction services and the supply of staff engaged in the construction work.

Supplies of gold

Supplies of gold products of a purity higher than 32.5% and investment gold are subject to reverse charge provided that the customer is established in Belgium and submits periodic VAT returns, or if not established, is registered for VAT purposes in Belgium with a fiscal representative appointed.

In addition to the general wording for reverse charge, the invoice can add a statement referring to article 20bis of Royal Decree 1.

Therefore, the VAT registration of the customer is not mandatory in case of performing local purchases of gold products subject to reverse charge, because the customer must be previously registered for VAT to apply reverse charge.

• Supplier requirements
  N/a
• Customer requirements
  Customer is established in Belgium or not established but VAT registered with a fiscal representative and submits periodic VAT returns.
• Scope
  Supplies of gold products of a purity higher than 32.5% and investment gold.

Supplies of CO2 emission allowances

The supplies of CO2 emission allowances are subject to reverse charge provided that the customer is established in Belgium and submits periodic VAT returns, or if not established, is VAT registered in Belgium with a fiscal representative.

In addition to the general wording for reverse charge, the invoice can add a statement referring to article 20ter of Royal Decree 1.

• Supplier requirements
  N/a
• Customer requirements
  Customer is established in Belgium or not established but VAT registered with a fiscal representative and submits periodic VAT returns.
• Scope
  Supplies of CO2 emission allowances.

Therefore, the VAT registration of the customer is not mandatory in case of performing local purchases of CO2 emission allowances because the customer must be previously registered for VAT to apply reverse charge.

Belgian use and enjoyment rule 

Use and enjoyment rules can deviate the place of supply rules according to the country where the service is effectively consumed.

When applying the use and enjoyment rules, if the service is taxed in the EU, the non-EU supplier may have to register for VAT in Belgium.

We refer to negative use and enjoyment rules when the provision is intended to avoid non-taxation. We refer to positive use and enjoyment rules when intended to avoid double-taxation. Belgium introduced both, positive and negative provisions

The following services are subject to the “use and enjoyment” rule:

• Transport and connected services that take place outside the EU and are invoiced to a Belgian taxable person are not taxable in Belgium, and as such, considered outside the scope of Belgian VAT.
• Transport and connected services that take place in Belgium but are invoiced to a taxable person established outside the EU are taxable in Belgium, based on the “use and enjoyment” rule.

Find here the official circular Circular 2018/C/68 issued by the Belgian tax authorities introducing the use and enjoyment rule.