BelgiumManual

Value Added Tax in local language is "Belasting over de Toegevoegde Waarde" (BTW) – in Dutch – and "Taxe sur la Valeur Ajoutée" (TVA) – in French

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)

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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

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.

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Belgian use and enjoyment rule 

Member states can introduce another exception to the B2B rule according to the place where the services have been used and enjoyed. This exception may be introduced to avoid double taxation (positive use and enjoyment rules) or avoid non-taxation (negative use and enjoyment rules) or both. Check out our article for more information on use and enjoyment rules in the EU.

Belgium has introduced both, the negative and positive use and enjoyment rules on certain B2B services. The following services are subject to the “use and enjoyment” rule:

  • Transport and connected services carried out outside the EU and invoiced to a Belgian taxable person are considered outside the scope of Belgian VAT, based on the “use and enjoyment” rule.
  • Transport and connected services carried out in Belgium but invoiced to a taxable person established outside the EU are subject to Belgian VAT, based on the “use and enjoyment” rule.

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