VAT registration in Belgium
VAT is normally due by the supplier of goods or the service provider (general rule). Where, therefore, a foreign company carries out taxable operations in Belgium for which it is liable for VAT, it must charge Belgian VAT to its client.
In order to do so, it must register for VAT purposes and receive a Belgian VAT number either directly or either through a VAT representative:
- In principle, non-European companies cannot register for VAT in Belgium themselves. They must do so through a VAT representative. This is a local company that will represent you towards the local VAT authorities. He is responsible for meeting all your VAT obligations, including those of which he has no knowledge. For this reason, the fiscal representative may require a deposit (e.g. a bank guarantee) from you before accepting the representation assignment.
- European companies are not obliged to appoint a tax representative. However, to facilitate their relations with the local tax authorities, they may appoint a proxyholder (agent) to carry out the tax formalities on their behalf. In this case, it is not necessary to issue a bank guarantee. The company remains solely responsible for paying its VAT debts.
Which solution to choose?
Combined with the general reverse charge mechanism applicable in Belgium, the option for an EU company to appoint a fiscal representative can be useful in order to avoid pre-financing of VAT. Indeed, that mechanism renders the client liable for the VAT due when the latter is a Belgian company submitting periodical returns or a foreign company identified for VAT purposes in Belgium with a tax representative.
Let's take an example : Purchase/ Re-sale of Goods
A French company purchases goods in Belgium and then resales them to a German firm which takes care of transporting them outside Belgium. The French company performs a taxable operation (an intra-community delivery) for which it is obliged to register for VAT purpose in Belgium. Appointing or not a fiscal representative on its own authority will depend on the place where its provider is established:
- If its supplier is established in Belgium, the latter must issue an invoice charging Belgian VAT. There is no point for the French company to register for VAT through a fiscal representative. It can register directly for VAT purposes;
- However, if its supplier is not established in Belgium (for example if it is a Dutch provider), the latter will also have to issue an invoice charging Belgian VAT unless the French company has a Belgian VAT identification number and a fiscal representative.In this case, the person liable for the payment of Belgian VAT to the Treasury is the French company itself (generalised reverse charge mechanism). Therefore it is useful for the French company to appoint a fiscal representative in such a situation in order to avoid any VAT pre-financing.
Let's take an example : Carrying out a construction work
An Austrian company is operating a construction site in Belgium [construction work] on behalf of a German company which has a Belgian VAT identification number but no fiscal representative (direct registration for VAT purposes). It calls on Belgian subcontractors to undertake part of construction works.
The Austrian company is performing a taxable operation (construction works) for which it is obliged to obtain a VAT identification number and must invoice Belgian VAT to its German client since the latter did not name a fiscal representative in Belgium, although it has a Belgian VAT number.
However, subcontractors will not have to charge Belgian VAT to the Austrian company. Indeed, as from January 1st 2023, the designation of a fiscal representative is no longer required to apply the specific reverse charge mechanism for construction works. As a result, Belgian subcontractors will be able to issue invoices applying reverse charge to the Austrian company using its direct Belgian VAT number.
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