• END OF THE VAT CERTIFICATE FOR ‘YELLOW REGISTRATION PLATES’

END OF THE VAT CERTIFICATE FOR ‘YELLOW REGISTRATION PLATES’

02 October 2014

They might be familiar, the so-called ‘yellow registration plates’. A typical example is the Belgian resident who works for a Luxembourgian employer, who puts a company car at his disposal. Until recently, these employees had to be able in case of a roadside control to present a VAT certificate so that the car would not be subject to the registration requirement in Belgium.

VAT certificate as exception to the registration requirement

This requirement is in force of course not only for the mentioned example of a Luxembourgian employer, but for all cars, which are provided by a foreign employer.

Until 30 September included, rather strict conditions are however in force to be able to apply the exemption to the registration requirement. The car has to be provided by an employer abroad to an employee – Belgian resident. Furthermore, for VAT purposes, the car may be used in Belgium only for commuting between home and work and for other private travel.

The requirement to keep the VAT certificate in the car is abolished as of 1 October 2014. Instead, other documents must be presented in case of roadside control (cf. below).

Extension of the scope

The rules for the exemption of registration requirement in Belgium have gained some flexibility.

The concept of “employer” has been extended to a “foreign principal”. The new rules formalise in this way the usages, which were already authorised in the practice. From now on, managers, shareholders … even in other forms of cooperation than these of an employment agreement, can qualify as foreign principal.

Furthermore, the Belgian resident does not have to be only an employee anymore. The exemption of registration requirement is, from now on, valid for any individual (Belgian resident) who is provided with a company car by a foreign principal. The Belgian resident may use the car for both professional purposes and private purposes.

Documents on board

Instead of the VAT certificate, other documents should be kept in the vehicle. These are:

  • A copy of the employment contract or of the assignment (in case the cooperation takes place outside the context of an employment agreement), and
  • A document established by the foreign employer or principal which testifies that he has provided the vehicle to his employee or contractor.

Other exemptions

There are also some new exemptions:

  • The provision free of charge of vehicles by a foreign principal to a Belgian resident (individual) for the duration of maximum one month. The driver has to keep on board a document, established by the foreign principal, indicating that he gives his authorisation to use the vehicle for a fixed period and mentioning the end date;
  • The vehicle that is used by foreign students for the duration of their studies, provided that they are registered with an educational institution established in Belgium and they solely stay in Belgium to pursue their studies.

Contact

Should you have any further question or require a personal advice with respect to the impact of these rules on your company, please contact your usual contact person at BDO or you may send an email to [email protected] for the attention of one of the members of our Competence Centre VAT:

  • Erwin Boumans: 02/778.01.00
  • Pascal Dauw: 09/210.54.10
  • Kaatje Bondewel: 02/778.01.00
  • Brigitte Braeckmans: 03/230.58.40
  • Joëlle Teuwen: 081/ 20.87.87