VAT registrations and simplifications in Belgium
When do I need a Belgian VAT number?
As a general rule, a foreign business must register for VAT in Belgium as soon as a taxable supply is made. The following are some usual examples of taxable transactions:
- Domestic supply of goods not reverse charged: A supply of goods located in Belgium to a Belgian customer where the supply is not subject to reverse charge requires a VAT registration of the supplier. See Reverse charge rules in Belgium for more information
- Supply of services not reverse charged: Foreign non-established businesses supplying services on which Belgian VAT is due must register for VAT. These services are rather exceptional, as the general B2B rule would apply
- Export: Exporting goods to a non-EU country requires a VAT number before the export is made
- Intra-Community acquisition: Acquiring goods from another Member State where all conditions for intra-Community movements are met requires the customer to register for VAT
- Intra-Community supply: Supplying goods another Member State is also a taxable transaction that obliges the supplier to register for VAT
- Distance sales above the threshold also require a VAT number. See Belgian distance sales rules for more information
A voluntary registration is not possible in Belgium. This is, companies cannot register if they have not made a taxable transaction.
The VAT registration threshold in Belgium only applies to local established companies.
Fiscal representative requirements in Belgium?
Non-EU businesses must appoint a Belgian fiscal representative when registering for VAT purposes in Belgium. The fiscal representative is jointly and severally liable for the tax debts of the company. The fiscal representative must be a Belgian resident, either a legal or physical person. Often multinational companies appoint another member of the group to act as fiscal representative of a non-established company in Belgium.
EU businesses can register directly for VAT purposes. This means that the legal representative of the company can sign the registration form without any local Belgian involvement.
Belgian VAT groups
Where more than one taxable person established in Belgium are closely bound by financial, economic and organizational links, these companies can create a VAT group and be treated as a single taxable person for VAT purposes in Belgium.
As regards the VAT group criteria, financial links exist when more than 10% of the shares of a member is directly or indirectly held by the same person or business. Organizational links refer to the common management of different members. Economic links exist where the purpose and activity of the members has the same object and goal and benefits the group as a whole.
In addition, the following VAT grouping rules apply in Belgium:
- Permanent establishments and subsidiaries can also be part of a Belgian VAT group
- VAT grouping is optional in Belgium. Companies can apply for a VAT group when meeting the requirements or they can choose to remain separated entities for VAT purposes
- Once the application is approved, a group VAT number is granted to the group. In addition, each individual entity keeps its own VAT number
- Holding companies are normally not allowed to be part of a VAT group. However, this rule must be read in conjunction with Case C-85/11
- Every member of the group is jointly and severally liable for the VAT debts of the entire group
- Members of a VAT group submit one single consolidated VAT return. It is not possible to file separate VAT returns for each entity. On the contrary, separate ECSL returns are filed for each member using its own VAT number
Belgian consignment and call-off stock
Under a consignment stock arrangement, the supplier (consignor) places the goods at the disposal of the buyer (consignee), who purchases and "flash sells" the goods as soon as he finds a client.
Where consignment stock happens as part of an international trade agreement, the supplier is often required to register for VAT in the country of the customer. However, some countries allow a simplification where the supplier does not register, and the customer reports an intra-Community acquisition when he retrieves the goods from the warehouse. This simplification only applies where both the supplier and customer are established in the European Union.
Belgium introduced a consignment stock and call of stock simplification (no difference between consignment and call of stock in Belgian law) for intra-Community trade within the EU. The conditions for this simplification to apply are:
- The stock must be kept under control of the consignee either in its own premises or a warehouse designated by him
- Separate VAT books are required for all movements under the consignment stock simplification
- The consignor is not established nor VAT registered in Belgium and the consignee is a taxable person with a Belgian VAT number
- There is no time limit in which the goods can stay in consignment
- An intra-Community acquisition is reported by the consignee at the time the goods arrive to Belgium. At that time, a pro-forma invoice must be issued by the consignor making reference to the notice issued by the authorities about EU consignment stock
- Regarding VAT reporting obligations, the consignor reports the sale in the ECSL of its home country. The consignee reports an intra-Community acquisition in Belgium followed by a domestic sale to the final client
More information is available (in Dutch and French) in the notice published by the Belgian authorities about intra-Community consignment stock and other obligations of non-established companies in Belgium.
Bad debt relief in Belgium
It is possible to reclaim VAT on bad debts in Belgium. The process is however not as simple as in other EU countries. A liquidator must have been appointed to manage the bad debts of the customer. Once appointed, the liquidator must receive a list of unpaid invoices. Once the invoices have been reviewed and the liquidator has determined that these invoices cannot be paid, he will issue a certificate allowing the company to recover the VAT paid to the authorities on the unpaid invoices. Only then it will be allowed to include this VAT as input VAT in the return.
In case of bankruptcy of the customer, input VAT can be directly deducted as from the date of official bankruptcy. Also, in case of other proceedings such as debt reorganization by the judge, the right to deduct arises when the Court decision is made.
More information is available (in French and Dutch) in the notice published by the tax authorities about Bad debts in Belgium.
Import VAT deferral and postponed import VAT in Belgium
Import VAT deferral allows companies to delay the payment of import VAT. Although import VAT is usually due at the time of importation, when import VAT deferral is allowed, this import VAT is due at a later stage (usually, between 4 and 10 weeks after importing the goods).
Postponed import VAT accounting allows companies to avoid the payment of import VAT by declaring this amount as due and deductible in the VAT return. This system has a nil monetary effect for companies (unless partial exemption applies) and a cash flow advantage when importing goods into the country.
Belgium introduced the postponed import VAT accounting. Deferral of import VAT does not apply in Belgium. Businesses can apply for a postponed import VAT accounting license to the Belgian tax authorities. This application is open to non-established companies registered directly or via fiscal representative. Postponed import VAT accounting is often referred as "ET 14000 license".
More information is available in the notice published by the Belgian tax authorities about Postponed import VAT accounting.
Belgian customs warehouse and VAT warehouse
Customs or bonded warehouse is available for goods that have not cleared customs in the EU (T1). VAT and excise duties are not due when these goods are directly placed in the Customs warehouse. As soon as they exit this regime, these amounts are due. Sales within the customs warehouse are not subject to VAT. In case the goods are removed from a Customs warehouse to be placed in another customs regime, VAT is not due until the goods are released from the following warehouse.
A VAT warehousing regime is available in Belgium for cleared goods (T2). These goods have already paid customs duties. The conditions are similar to those of Customs warehouses. Only certain goods are allowed to be entered into a VAT warehouse in Belgium. More information is available in the notice published by the authorities.
Global VAT numbers – Belgian limited fiscal representation
Global VAT numbers, also known as freight forward VAT numbers or limited fiscal representation are allowed in Belgium. Global VAT numbers normally start by BE796.6
Global VAT numbers avoid the need for a VAT registration in Belgium. A business can use the VAT number of the representative, who will subsequently submit a consolidated VAT return with all transactions made by his clients. These numbers can only be used for certain transactions.