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12.2. VAT on the Supply of Services by Non-Residents

Under Art.18 of the VAT Code, anything that is done for consideration in the course or furtherance of a business and that is not a supply of goods, is a supply of services. The following are, amongst others, also considered to be supplies of services:

  • Physical or intellectual work including contract work (Art. 18(1)(1) of the VAT Code);
  • Provision of personnel to third parties (Art. 18(1)(2) of the VAT Code);
  • Mandate and agency services (Art. 18(1)(3) of the VAT Code);
  • Granting of the right to use movable goods (Art. 18(1)(4) of the VAT Code);
  • Transfer or licensing of goodwill;
  • Agreement not to engage in certain professional or business activities (Art. 18(1)(5) of the VAT Code);
  • Granting of the exclusive right to purchase or sell certain goods or the exclusive or non-exclusive right to carry on certain professional or business activities (Art. 18(1)(6) of the VAT Code);
  • Transfer of patents, trademarks, copyrights, rights relating to an industrial design or model or other similar rights, or granting permission to use such rights (Art. 18(1)(7) of the VAT Code);
  • Activities carried on by banks or other financial institutions (Art. 18(1)(13) of the VAT Code);
  • Services supplied electronically (Art. 18(1)(16) of the VAT Code);
  • Supply of services due to requisition by or in the name of a public authority or, more generally, due to the law or an administrative regulation (Art. 18(2) of the VAT Code);
  • Services of a travel agency which are related to travel (Art. 18(1)(2) of the VAT Code); and
  • Use of business assets for non-business purposes (Art. 19 of the VAT Code).

EU VAT rules make a distinction between “B2B” and “B2C” supply of services. In the case of B2B supply of services by a non-resident taxable person established anywhere in the territory of the EU to a person established in Belgium, the reverse charge mechanism applies and the recipient of the service will have to pay VAT over the amount invoiced. In case of B2C supply of services, the non-resident taxable person will have to charge VAT on the invoice.

In February 2019, Belgium partially transposed the EU Directive to simplify VAT requirements, which includes allowing small undertakings the option to apply the VAT rules used in their home country provided that annual sales do not exceed EUR 10,000 in the preceding year and the recipient is not a VAT taxable person (B2C). This mainly applies in relation to electronic service supplies.

Mini One Stop Shop (MOSS) Scheme

MOSS is an optional online service provided to taxpayers who provide electronically supplied, telecommunication and broadcasting services to consumers in the EU Member States. MOSS Scheme entered into force on 1 January 2015. Under the scheme, an opportunity is given to the taxpayer to register in one EU Member State (referred to as the Member State of Identification) and declare all supplies covered by the special scheme and pay the VAT due on these supplies. If a taxpayer exercises the option for MOSS, there is no obligation to register, file tax returns and issue VAT payments in each Member States where electronically supplied services, telecommunications, and broadcasting services are carried out.

VAT due for supplies covered by the MOSS is paid via the Member State of identification. Payments have to be made to a special account designated for the MOSS supplies. Payments are linked to the underlying VAT returns and are required to be made when submitting the return, or at the latest by the 20th day of the month following the return period.

Note that, input taxes cannot be deducted by using MOSS. Input deduction has to be effected through the VAT refund mechanism.

A taxpayer using the MOSS can opt out of the scheme, regardless of whether it continues to supply services which are eligible for the special scheme, by providing prior notice of at least 15 days before the end of the calendar quarter, to the Member State of Identification. Once opted out, the taxpayer will be excluded from using the MOSS in any Member State for two calendar quarters (quarantine period).

There are two schemes within the Mini One Stop Shop scheme:

  • Non-Union scheme for taxable persons that have no establishment within the EU; and
  • Union scheme for taxable persons that have an establishment within the EU (but are making supplies to Member States in which they are not established).

MOSS cannot be used in relation to the following:

  • Supplies of services other than telecommunications, broadcasting or e-services;
  • Supplies to non-taxable customers in a Member State where the supplier has established his or her business or has a fixed establishment (VAT on those supplies will be accounted for in the normal VAT return of that Member State);
  • Business to business supplies (including telecommunications, broadcasting or e-services); and
  • Supplies of goods.

Additional information can be found in the report published by the European Commission of the national rules applied by Belgium on the use of the MOSS rules.

Effective 1 July 2021, MOSS is expanded to the One Stop Shop system which will cover, inter alia, all services (and not only e-services) sold to consumers in the EU.