The general rule defines the place of supply to be deemed as the place where the supplier is established. Consequently, a Belgian business invoicing supply of services to a foreign company is deemed to issue an invoice with Belgian VAT.
However, the general rule has a number of particular provisions specifically planned by law that take into consideration the nature of services to determine its place of supply. For example, place of supply for services of an intellectual nature is deemed to be within the country where the customer is established; place of supply for services connected to immovable goods is deemed to be where the building is located, etc. As a result, a Belgian business invoicing supply of services of an intellectual nature to a foreign company is deemed to issue an invoice without VAT.
The general rule is of auxiliary application to these provisions therefore, in a situation where an exception applies, the general rule doesn’t.
Exceptions to general rules
Exceptions regarding place of supply remain for services of a certain nature:
Common provisions for B2B and B2C supply of services
- Supply of services connected to immovable goods
- Supply of transport for persons
- Supply of services connected to restaurant
- Supply of short-term transport rental services
- Supply of services of a cultural, artistic, scientific, sports, educational or entertainment nature ( congress and conference organisation included)
Provisions specific to B2C services
- Supply of services by intermediaries
- Supply of transport of goods
- Supply of long-term transport rental services
- Supply of valuation of, and works on movable goods
- Supply of electronic services as well as telecommunication services
- Certain supply of services provided to non-taxable persons established outside of the European Union (copyrights, advertising services, services of an intellectual nature, etc.)
The new rules concerning the place of supply of services will have a considerable impact on the VAT accounting and administrative treatment for all European companies:
- On VAT obligations: certain transactions will be reported in other boxes of the VAT return, filing of B2B services in a new intra-community listing, invoices modification, etc.
- On ERP systems: new « tax codes » implementation, adjustment of the clients database, etc.
- On internal control procedures: enquiring of VAT status for each client (B2B and B2C), verification of new VAT obligations consequent to the new rules (especially re-invoicing between entities of a same group) personnel training, formation du personnel, etc.
All current procedures will have to be reviewed and adjusted in order to integrate the new regulations.