• VAT changes in 2020

VAT changes in 2020

17 January 2020

As of 1 January 2020, the so-called 'quick fixes' came into effect in Belgium.

We are pleased to provide you with an overview of the most important changes.

Condition for an exempt intra-Community supply of goods

The supply of goods is exempt from VAT as an intra-Community supply of goods if the customer has a valid VAT identification number, assigned by an EU member state other than Belgium and if the supplier can provide the proof of transport from Belgium to another EU member state.

 

Valid VAT identification number

Since 1 January 2020, mentioning a valid VAT identification number of the customer became a material condition for applying the exemption. Previously this was only a formal condition. The exemption for an intra-Community supply of goods can, therefore, be refused if the valid VAT identification number of the customer, granted by another EU member state, is not available.

It is therefore recommended to introduce appropriate procedures in order to check the validity of the VAT identification number of the customer before the invoice is issued.

 

Simplified proof of transport

The transport of the goods to another EU member state must be proven by a set of documents (contracts, order forms, invoices, payment documents, CMR documents, etc.).

The Royal Decree No. 52 has been amended to indicate which supporting documents should be available, depending on who performs the transport (the supplier or the customer).

In this context, the existing administrative tolerance consisting of the use of the so-called destination document was now explicitly provided by the Royal Decree No. 52.

 

Chain transactions

A chain transaction is a transaction where several parties are involved in successive supplies of goods, but the goods are transported from the first to the last party in this chain.

In case of such chain transactions, only one of the sales transactions can be qualified as a supply of goods with transport. The other sales transactions are therefore automatically located at the place where the goods are made available, either in the Member State of departure of the goods or in the Member State of arrival of the goods. It is therefore essential to be able to allocate the transport to one of the sales relations from the chain. If the transport is carried out by or on behalf of the intermediary (when, for example, 3 parties (A, B, C) are involved), this could give rise to a discussion, as the Member States used to apply different rules.

The new regulation requires that the transport performed by or on the account of the intermediary (B) is exclusively attributed to the intermediary. This is usually the first supply in the chain. If however, the intermediary provides a VAT identification number of the Member State of dispatch (A), the intra-Community transport is allocated to the supply done by the intermediary (B) to his customer (C).

 

Call-off stock regulation

'Call-off stock' refers to the situation where the supplier already knows the identity of the person who will purchase the goods at the time of the transport of the goods to another Member State. The ownership of the goods is only transferred to the customer at a later stage and after the goods have arrived in the other Member State. This implies in principle a mandatory VAT registration in the Member State of arrival of the goods in order to indicate an intra-Community acquisition followed by a local supply of goods.

Belgium (as well as other EU member states) already had a 'call-off stock' regulation whereby the supplier is relieved of the Belgian VAT registration obligation under certain conditions. Since 1 January 2020, the conditions and formalities for the application of the scheme were harmonized across the EU Member States in order to avoid VAT registration in the Member State of arrival.

If the conditions are met, the transaction can be regarded as an intra-Community supply for the supplier in the Member State of departure and as an intra-Community acquisition for the customer in the Member State of arrival of the goods.

 

Changes in the European Sales Listing

The European Sales Listing (ESL) declaration now consists of 2 parts. The first part relates to the data that had to be communicated in the previous version too (VAT identification number of the customer, taxable amount and codes L, S or T). The second part relates to the information that must be communicated in the future with regard to the call-off stock arrangement.

 

Contact

Questions regarding the new rules as of 1 January 2020? Do not hesitate to contact our experts from the VAT team via your contact person or via [email protected].