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Localization of services

When a building contractor is operating a construction site in Belgium, he calls on (Belgian or foreign-) subcontractors on a frequent basis to undertake part or entirety of the work: rental of construction machinery (cranes, bulldozers, mechanical diggers, conveyors of exceptionally heavy loads, etc.) with or without the provision of staff, scaffolding rental, cleaning services, site supervision, measurement of the site, etc.

Within this framework, one should be watchful to the localization of these subcontractors’ supplies of services in regards to VAT. Only the supplies of services related to an immovable property must be taxed in Belgium. Other services will have to be taxed at the place where the foreign building contractor is established (“B2B” general rule – place of the recipient).



The place of taxation of different services rendered by subcontractors to a foreign building contractor within the frame of a worksite in Belgium can be highly debated with the Belgian Tax Authorities. The Belgian VAT wrongly invoiced by the subcontractor is not deductible by the building contractor and can besides lead to penalties and late payment interests.

Therefore, it is required to analyze carefully each operation in order to guarantee a correct VAT treatment. Guidelines provided by the VAT Committee may be very useful in case of litigation.


Document taxud.c.1(2011)319672 – Work document n° 688