News you can count on
Brexit update: UK companies with Belgian VAT number (and UK EORI number)
28 February 2019
The UK’s date of departure from the European Union currently remains 29 March 2019. The definitive outcome and whether a transition period or delay will be agreed remains uncertain. Negotiations are ongoing and British Members of Parliament will have to vote again on the Brexit deal by 12 March 2019.
As part of Brexit preparations, the Belgian VAT authorities have sent letters to all UK companies with a direct Belgian VAT registration to stress the importance for said companies to appoint a fiscal representative before the UK leaves the EU, which will become mandatory once Brexit is effective. In addition, the authorities have already begun to accept requests for Belgian EORI numbers.
CJEU sets complex rules for VAT recovery by businesses operating cross-border through branches
25 January 2019
On 24 January 2019, the Court of Justice of the European Union (CJEU) ruled that branches, which incur VAT on expenses used wholly or partly for head office supplies, must consider the head office’s activity to determine the branch VAT recovery calculation (Case C- 165/17 Morgan Stanley). This interpretation of the EU VAT rules is likely to result in additional complexity and cost for financial institutions operating through branch structures in Europe.
Test yourself: Prepared for a “no-deal” Brexit?
17 January 2019
Recent political developments indicate the increasing likelihood of a “no-deal” (or “hard”) Brexit. If such a scenario occurs, Customs and VAT are areas that will be especially impacted.
Deloitte has created a self-analysis questionnaire which allows you to obtain some initial insights on the impact that Brexit might have on the Customs and VAT position of your company.
Brexit Readiness Update: the latest developments and more
16 January 2019
Political developments - Impact for global trade - EU Commission preparing Brexit Contingency Plan - Belgium preparing a Brexit emergency law - Market/industry developments - Helping you prepare for a “no-deal” Brexit - Brexit webinars
Belgian VAT legislation on vouchers not yet published but still applicable as of 1 January 2019
7 January 2019
The EU VAT Directive on the VAT treatment of vouchers should, in principle, have been transposed into Belgian law by 31 December 2018 at the latest. In this regard, the Minister of Finance published a message (Dutch | French) explaining that due to a parliamentary delay, the adjustments to the Belgian VAT Code have not been published as scheduled.
Notwithstanding the legislation’s pending publication, the Minister of Finance assured that it will have retroactive effect as of 1 January 2019. As such, the new rules on vouchers should already be adhered to in practice.
European Commission proposals on VAT for e-Commerce: New VAT obligations for marketplaces and Payment Service Providers
18 December 2018
On 11 December 2018, the Commission published a proposal to amend the VAT Directive and a proposal to amend Implementing Regulation 282/2011. The aim is to ensure a smooth transition to the new VAT rules for e-commerce, which enter into force in January 2021. The proposal provides more details on when a marketplace or electronic platform is considered as facilitating a supply, hence becoming liable for VAT on the sales transaction. On 12 December 2018, the Commission published another proposal in which Payment Service Providers (PSP’s) will be required to transmit cross border payment data in order to allow tax authorities to better control the correct application of VAT on cross border supplies, particularly with respect to B2C e-Commerce transactions.
Belgian VAT authorities publish FAQ on the VAT treatment of vouchers
12 December 2018
On 7 December 2018, the VAT authorities published a Circular (2018/C/127) containing Frequently Asked Questions (“FAQ”) relating to the VAT treatment of ‘sold’ vouchers. The EU VAT Directive on the VAT treatment of vouchers should ultimately be transposed into Belgian law on 31 December 2018. In preparation for these changes, the FAQ briefly explains the new rules, which will be effective as of 1 January 2019.
CJEU: payments for early contract termination can be subject to VAT
27 November 2018
On 22 November 2018, the CJEU decided that payments for early termination of a broadband contract, under certain circumstances, do not qualify as indemnities and are therefore subject to VAT (C-295/17,22 November 2018, MEO – Serviços de Comunicações e Multimédia). From the judgment, it appears that the way in which the termination payment is defined is decisive in determining whether or not VAT must be charged.
Changes to Intrastat Dispatches Return as of 2019
26 November 2018
From 1 January 2019, more extensive data will need to be included in the Intrastat Dispatches Return. These amendments are requested by the Belgian National Bank as part of a European project for the modernisation of Intrastat (Dutch | French | English).
Preparing for Brexit: Analyse the Customs and VAT impact with our free online questionnaire
8 November 2018
The UK will leave the European Union (EU) on 29 March 2019. Uncertainty remains on both whether agreement on the withdrawal terms will be reached, and the details of the future relationship. But we can say with some certainty that, whatever the outcome, Brexit will have a Customs and VAT impact for companies doing business in and/or with the UK.
In order to allow you to obtain some initial insights on the impact that Brexit might have on the Customs and VAT position of your company, Deloitte has created a self-analysis questionnaire.
CJEU widens scope for VAT recovery on costs related to (aborted) takeover bids
18 October 2018
On 17 October 2018, the CJEU decided that VAT is recoverable on acquisition costs incurred by Ryanair Ltd with a view to provide the company to be acquired with taxable management services, even if the transaction was aborted and therefore no actual services were provided by Ryanair. (C-249/17). Currently, many EU Member States (including Belgium) take a restrictive view on the right to deduct VAT on acquisition costs made by holding companies if there is no direct and immediate link with a taxable turnover.
EU Council agrees on measures to combat VAT fraud
5 October 2018
On 2 October 2018, the Council of the European Union reached a political agreement on the introduction of a generalised reverse charge mechanism and adopted measures to strengthen administrative cooperation in the field of VAT. Furthermore, the Council decided to extend the application of two existing temporary measures until 30 June 2022: (1) the optional reverse charge mechanism and (2) the quick reaction mechanism.
European Council agrees on four ‘quick fixes’ to EU VAT system
4 October 2018
On 2 October 2018, European finance ministers agreed to introduce four quick fixes to improve the current cross-border VAT regime, applicable as of 1 January 2020. The agreement did not include a fifth quick-fix that was suggested earlier this year in relation to the cost-sharing VAT exemption for the financial and insurance sectors which was discussed during in the ECOFIN Council of 22 June 2018.
Reduced VAT rate for e-books
3 October 2018
On 2 October 2018, the European Council agreed on the legislative proposal allowing Member States to apply reduced, super-reduced or zero VAT rates to electronic publications, aligning them with the VAT treatment of physical publications. In Belgium, this will allow the government to introduce the reduced rate of 6% for e-books and the zero rate for e-newspapers, which required this change to the VAT Directive as a preliminary step.
VAT on immovable rent: draft bill passed in Chamber of Representatives Commission on Finance
1 October 2018
The Chamber of Representatives Commission on Finance passed the draft bill regarding the option to subject immovable rent to VAT on 19 September 2018.
The essential provisions of the law are summarised.
Optional VAT on immovable letting: draft bill to be submitted to Parliament
1 August 2018
Following the Council of State’s remarks on initial texts regarding the optional VAT on immovable letting, the Belgian government considered several changes and has reached a consensus on the final texts. This VAT alert outlines these changes.
New policy on administrative penalties in VAT matters
3 July 2018
The Belgian Minister of Finance recently announced (Dutch | French) new instructions for the Belgian VAT authorities, with respect to administrative penalties imposed on taxpayers when they violate formal VAT rules. This new policy will be based on the assumption that a taxpayer is in good faith, and it will apply with all penalties imposed since 1 January 2018.
A preview on likely changes to the draft legislation for VAT on immovable letting
15 June 2018
Following the Council of State’s criticism in its advice on the pre-draft legislation concerning VAT on immovable letting, the federal Belgian government is preparing several changes on the new regulation’s entry into force.
Moreover, the new definition of ‘warehouses’ is likely to be refined, and the scope of some compensatory and budgetary measures may be expanded.
European Commission issues detailed technical proposal for definitive VAT system
29 May 2018
On 25 May 2018, the European Commission released a proposal containing detailed technical amendments to the EU VAT Directive that supplement the recently proposed overhaul of the system to reinforce fraud-resilience.
Under the proposal, intra-EU cross border supplies of goods between businesses would no longer be VAT exempt. Applying VAT on cross border trade should significantly reduce VAT fraud in the EU, especially missing trader intra-Community (MTIC) fraud. At the same time, the changes would also reduce the number of administrative steps needed when businesses sell to companies in other Member States, and would eliminate specific reporting obligations under the current transitional VAT regime for trade in goods. The Commission aims for these rules to enter into force on 1 July 2022.
CJEU: Advocate General widens scope for VAT recovery on costs related to (aborted) share transactions
9 May 2018
On 3 May 2018, Advocate General Kokott (the “A-G”) delivered a favourable opinion in the Irish case involving Ryanair Ltd (C-249/17), regarding the deduction of input VAT incurred in relation to the airline’s aborted takeover of Aer Lingus.
CJEU allows use of simplified triangulation for intermediary with VAT number in Member State of dispatch
23 April 2018
The CJEU ruled that taxpayers can apply the simplification for triangular sales if they use a VAT number other than that registered in the Member State of dispatch or arrival, even if they are also VAT registered in the Member State of dispatch (C-580/16 judgment). The interpretation given by the CJEU overturns restrictions in a number of Member States, applied to taxpayers with multiple VAT registrations, simplifying the setup of billing flows for cross border trades.
Belgian Constitutional Court annuls VAT for online games and online gambling
28 March 2018
On 22 March 2018, the Constitutional Court annulled 2016 legislation which removed the VAT exemption for online games and online gambling. The annulment will not produce retroactive effects but will only be applicable upon its publication in the Belgian Official Journal.
Belgian government approves option to tax B2B immovable letting
26 March 2018
As part of the 23 March 2018 budgetary control meeting, the Belgian government approved the long awaited VAT reform that will introduce the possibility for landlords to opt for the application of VAT to immovable letting agreements concluded with professional tenants. The new regulation’s entry into force is planned for 1 October 2018.
European Commission issues draft Directives on the taxation of the digital economy
26 March 2018
On 21 March 2018, the European Commission issued two draft Directives on the taxation of the digital economy. Under the proposed new comprehensive solution, companies would have to pay corporate income tax in each Member State where they have a significant digital presence. In the interim, the Commission proposes a 3% revenue-based Digital Services Tax on specific digital services where the main value is created through user participation.
CJEU confirms strict VAT exemption conditions for transport allocation in chain transactions
26 February 2018
On 21 February 2018, the CJEU issued a ruling in another case regarding the VAT exemption for cross border chain transactions (C‑628/16 Kreuzmayer). In the case at hand, the third party in the chain (party C) had transported the goods. The CJEU considered that in such case, the second supply should have been exempt from VAT, as it is an intra-Community supply. Party C was therefore not entitled to deduct the input VAT that was incorrectly charged on the second transaction by Party B. The case reconfirms the importance of verifying the correct VAT treatment of incoming supplies, based on all information available.
EU publishes guidance on Brexit consequences for Customs and VAT
15 February 2018
In a 29 January 2018 press release, the Council announced a second set of supplementing negotiating directives detailing the EU27 (EU member state gathering without the UK) position regarding a transition period in relation to Brexit. These directives present a transition period that could not last beyond 31 December 2020.
Then on 30 January 2018, the EU Commission published a document giving businesses an early warning regarding key Customs and VAT challenges that they will need to tackle the moment the United Kingdom would no longer be a Member of the European Union. Unless a transitional period is agreed upon between the EU and the UK, the EU Customs and VAT rules will no longer apply in the UK from 30 March 2019.
European Commission proposal regarding new simplification measures for SMEs
22 January 2018
On 18 January 2018, the European Commission published a legislative proposal to simplify VAT compliance for small and medium-sized companies (‘SMEs’). It aims to create a modern, simplified SME scheme, introducing a new EU wide category of SMEs benefiting from administrative simplifications, and a broader and more flexible VAT exemption scheme, which remains based on national thresholds. The new legislation’s entry into force is foreseen for July 2022.
EU proposal on more flexible VAT rates
19 January 2018
On 18 January 2018, the European Commission published a legislative proposal to allow Member States more flexibility when defining their national reduced or zero VAT rates. These changes’ entry into force is planned for 2022, in connection with the implementation of the definitive VAT regime for B2B cross-border supplies (previous coverage in VAT alert of 5 October 2017).
Boehringer Ingelheim CJEU case: Pharmaceutical manufacturer can reduce output VAT for rebates paid to third parties
12 January 2018
On 20 December 2017, the CJEU ruled in the Boehringher Ingelheim Pharma case (C-462/16) that a pharmaceutical company should be allowed to adjust its output VAT in relation to statutory rebates paid to private health insurance companies.
EU ECOFIN Council adopts VAT e-Commerce package
6 December 2017
On 5 December 2017, the European Council adopted legislative proposals made by the European Commission in December 2016 for a drastic change to VAT rules for online sales of goods and services in Europe (previous coverage in VAT alerts of 2 December 2016 and 8 November 2017). The package contains simplifications to the current Mini One Stop Shop (MOSS) regime for cross-border telecommunications, broadcasting and electronic services, as well as a switch to taxation at destination and simplified declaration through a One Stop Shop (OSS) for distance sales of goods. It also introduces a VAT liability for electronic interfaces (e.g. platforms) that facilitate supplies of (low value) goods imported from outside the EU or for sales made within the EU by non-EU based vendors. The new legislation enters into force in phases, namely in 2019 and 2021.
European Commission releases proposal for enhanced administrative cooperation in VAT
4 December 2017
On 30 November 2017, the European Commission published a proposal to provide Member States with new tools to combat VAT fraud. This proposal amends Regulation (EU) n° 904/2010 of 7 October 2010 on administrative cooperation and combating fraud in the field of value added tax.
New VAT rules for logistic service providers
23 November 2017
From 23 November 2017, goods transportation in Belgium, performed for or invoiced to customers established outside the EU, is subject to new VAT rules. The transport of goods for a Belgian customer that partly takes place on non-EU territory is also subject to changed VAT rules.
EU ECOFIN Council delays decision on VAT e-Commerce package
8 November 2017
Shortly before the end of 2016, the European Commission published a legislative proposal for a drastic change to VAT rules for online sales of goods and services in Europe (VAT alert of 2 December 2016). This proposal, as amended during the Estonian EU Presidency, was on the agenda of the 7 November 2017 Council with the aim of reaching a political decision. As there was no unanimous approval on the current proposal, this decision has consequently been delayed until the next meeting on 5 December 2017.
Belgian government unexpectedly abandons optional VAT on immovable letting
23 October 2017
As part of the ‘Summer Agreement’, the Belgian government announced at the end of July 2017 that it was to introduce a new optional regime applying VAT to standard immovable letting between businesses. Deloitte has learnt that this plan has been abandoned after government meetings during the weekend of 21-22 October 2017. Only an extension of the conditions to apply VAT on the letting of a warehouse facility has been maintained.
Requirement of compliant invoice for VAT deduction: Belgian tax authorities adapt guidance
18 October 2017
On 12 October 2017, the Belgian VAT authorities published a Circular Letter providing guidelines regarding the requirement of a compliant invoice, to ensure the right to deduct incoming VAT.
Automated collection of outstanding VAT debts
16 October 2017
In an attempt to harmonise the procedure for authorities’ collection of (tax) debts, a draft law to automate the collection of VAT debts is currently on the table.
Inspired by the automated collection procedure for direct taxes, the government proposes the introduction of a similar process for VAT debts.
European Commission releases proposals for reform of VAT system for intra-EU trade
5 October 2017
On 4 October 2017, the European Commission published details of its plan for reform of the EU VAT system. This is the first set of proposals of two (introducing the main principles), with the second set providing more details expected in Spring 2018. It puts forward a ‘definitive system’ that will replace the intra-Community supply regime introduced in 1993. While the proposals give an interesting view of what these reforms will look like, the ultimate impact on business will depend upon the detailed proposals. The proposals and related documents can be found on the Single VAT Area page of the Commission’s website.
VAT cases in CJEU: Cost Sharing Groups red carded in banking and insurance sector
22 September 2017
The financial services industry held its breath on 21 September 2017, when the Court of Justice of the European Union (CJEU) rendered its judgments in the VAT cases involving DNB Banka (C-326/15), Aviva (C-605/15), and EC vs. Germany (C-616/15). The Court ruled that the VAT exemption for cost sharing groups cannot apply in the banking and insurance sector. With this judgment, the Court goes against accepted practice in many Member States, including Belgium. Importantly, the Court clearly prohibits Member States from applying the judgment retrospectively.
Changes made to VAT exemption for diplomats
Beginning 1 August 2017, an electronic control system for the VAT exemption available to diplomats in Belgium will apply. New legislation abolishes [FR/NL] the immediate exemption for covered transactions; instead, VAT will be applied to the transaction, and the diplomat will have to claim a refund of the VAT through an accredited company. This system should ensure greater legal certainty for vendors and retailers, and should reduce challenges by the tax authorities on the application of the exemption during VAT audits. A transition period is provided for until 31 December 2017, and the forms used to claim the immediate VAT exemption (Forms 450 and 451) will be abolished as from 1 January 2018.
European VAT reporting: SII goes live in Spain
26 July 2017
On 1 July 2017, the SII (Suministro Inmediato de Informacion/Immediate Supply of Information) legislation entered into force in Spain. SII requires taxpayers to submit VAT relevant transactional data, in a specific XML format and in close to real-time speed, to the Spanish tax authorities (AEAT).
There is much more to the SII framework than simply being a new reporting requirement. Given the immediate nature of the reporting activity involved, taxpayers have to implement a nearly fully automated SII process. While implementing their systems, taxpayers are exposed to a variety of challenges.
Belgium to introduce (optional) VAT on immovable letting
26 July 2017
Immovable letting has always been exempt from VAT in Belgium since the introduction of the VAT system. Within the framework of budgetary discussions, the Belgian government has decided to abolish this VAT exemption and introduce a regime allowing the landlord to opt to apply VAT to the immovable letting.