VAT, customs & excise duties

Foreign companies doing business in Belgium always have to deal with Belgian VAT. This can give rise to a whole range of questions. They often involve the correct determination of VAT liability, the correct collection of VAT and its correct payment to the tax authorities, applying for a VAT number (mandatory or not), keeping correct VAT accounts and keeping the necessary VAT documents, VAT refunds in Belgium, etc. Even the mere transfer of goods in your possession to a warehouse in Belgium is subject to VAT obligations.

Do you have questions about VAT in Belgium? Our tax lawyer Thomas Hermie will be happy to advise you.

VAT in Belgium

All services provided or goods delivered by a company are generally subject to turnover tax in Belgium. In the German-speaking part of Belgium, turnover tax is often called Mehrwertsteuer or Umsatzsteuer. In the Flemish-speaking region, it is called belasting over de toegevoegde waarde, or BTW for short. In French, it is called taxe sur la valeur ajoutée, or TVA for short.

This tax is levied on the final consumer, usually the customer, on top of the ordinary price of the goods or services, and is therefore an indirect tax. Consequently, VAT does not affect the company’s turnover, at least not if it is 100% entitled to deduct VAT.

Normally, VAT in Belgium is 21%. In exceptional cases regulated by law, such as foodstuffs, certain construction and renovation works, short-term (hotel) accommodation, catering and hospitality, passenger transport, cultural activities or certain energy products, a reduced rate of 6% or 12% may be applied.

Who is liable to pay VAT in Belgium?

In principle, all companies established in Belgium are liable to VAT from the first euro of turnover. However, there is a tax exemption scheme for Belgian-based small businesses with an annual turnover of up to EUR 25,000 (excluding VAT). These companies are exempt from most tax VAT obligations.

Moreover, companies, not established in Belgium, may still owe VAT in Belgium under certain circumstances. Especially for companies operating cross-border, the company’s VAT liability in Belgium depends on the specific circumstances of the case. However, the tax liability is often shifted from the service providing company to the B2B customer established in Belgium (i.e. application of the reverse-charge mechanism). However, this does not apply to supplies to private B2C customers.

Also note that when non-Belgian subcontractors are engaged, the reverse-charge arrangement generally cannot be applied. In the construction, assembly and industrial sectors, this often results in the main contractor and/or its subcontractors having to register in Belgium for VAT purposes. This is also often the case when organising events and seminars.

It is advisable to have the existence of any VAT obligation checked by a tax lawyer. After all, if the foreign company does not fulfil its obligations, it risks having to pay overdue Belgian VAT, plus considerable penalties and interest.

Obligations of a company liable for VAT

If a company is required to register for VAT in Belgium, it must fulfil a number of obligations.

In addition to keeping comprehensive accounts, the company must submit annual statements of all customers of the company liable for VAT (the Belgian customer list) and ( three)monthly statements of the company’s turnover from Belgium to other EU Member States (the intra-community customer list, i.e. a list of all transactions the company has carried out with VAT-identified customers in other EU countries). Moreover, depending on the annual turnover, the company must submit a VAT declaration every month or quarter.

VAT refund or correction

Especially in cross-border cases, it often happens that VAT was wrongly not collected or was collected in the wrong country. In Belgium, however, it is possible to file a “spontaneous regularisation”, i.e. if you correct in time and take action, you can avoid or at least limit fines. We have years of experience and good contacts in this area and can offer you professional support.

It is also possible that Belgian VAT has been charged even though you do not have a Belgian VAT number. In that case, it is possible to reclaim the VAT already paid (e.g. from the Belgian state). We will be happy to assist you in this matter.

Fiscal representation

Non-EU-based companies must appoint a fiscal representative in Belgium if they want to apply for a Belgian VAT number.

For EU-based construction companies, appointing a fiscal representative can also have advantages, as it allows subcontractors not having to register for VAT in Belgium and allows the main contractor to purchase construction services on a reverse charge basis (i.e. greater cash flow advantage).

The fiscal representative is jointly and severally liable for all Belgian VAT, as well as for any penalties and interest. We offer this fiscal representation.

Optimising EU imports via Belgium through a (favourable) import licence

In Belgium, it is possible to apply for a special import licence, which allows the applicant to declare the payment of import VAT via the reverse charge mechanism in the Belgian VAT declaration (instead of pre-financing it with the customs agent or customs office). The ability to declare the import VAT in the VAT declaration results in a cash flow advantage, as the import VAT then does not have to be pre-financed. We can apply for this licence for your company.

VAT ruling

If one is unsure about a certain matter in terms of VAT, one can request a ruling or administrative confirmation from the Belgian VAT office and thus obtain legal certainty. Here, too, we can provide professional support.

Our activities in the field of VAT

    • Research into VAT liability in Belgium
    • Application for a Belgian VAT number
    • Fiscal representation
    • Support in the management of correct VAT accounts and VAT documents
    • VAT returns and other compliance (e.g. Intrastat) in Belgium
    • Optimisation of VAT rates
    • Refund of VAT in Belgium

Our VAT team

Essentially, our VAT team covers the entire spectrum of indirect taxes, with a special focus on e-commerce, web shops and digital economy, construction industry, real estate/real estate management, automotive (incl. suppliers), heavy industry, manufacturing and industrial factory projects, pharmaceutical and medical sector and in general handling VAT issues related to supply chain.

Contact

Do you have any questions about VAT in Belgium? Feel free to contact our tax lawyer Thomas Hermie. By e-mail at t.hermie@euregio.law or by phone at +32 2 513 40 58.

VAT, customs & excise duties | Euregio Law & Tax