VAT legislation adopted regarding chargeability of VAT, VAT groupings and small businesses

VAT legislation adopted.

Parliament has adopted three laws which respectively contain new rules on the chargeability of VAT, implement an ECJ decision on VAT groupings and raise the ceiling for the exemption of small businesses..

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VAT chargeable again upon issuance of invoice as from 1 January 2016

The first law contains new rules on the chargeability of VAT (cfr. our earlier e-tax flash). VAT on the supply of goods and services in B2B situations becomes chargeable upon the issuance of the invoice. If no invoice is issued before the 15th of the month following the supply, VAT is chargeable on that date. If a (partial) payment is made before the supply, VAT is chargeable on the date of payment.

The rules for intracommunity supplies of goods and services do not change; neither does the cash based regime for most B2C supplies. For supplies of movable goods and services to public bodies (B2G-supplies), the new law provides for a cash based regime, except in case a reverse charge applies.

The new rules enter into force as from 1 January 2016.

The current rules regarding the chargeability of VAT, which entered into force as from 1 January 2013, caused many practical concerns for businesses. Therefore, the tax authorities provided for a transitional regime which was eventually extended indefinitely, in anticipation of a new change to the legislation, which has now been adopted.

Belgium changes VAT Code to comply with ECJ decision in Skandia case

The second law removes article 19bis of the VAT Code to set the Belgian legislation in line with the judgment of the ECJ in the Skandia case. In that case, the ECJ ruled that the services provided by a head office in a third country to its branch in an EU Member State are taxable if that branch is part of a VAT group. Earlier this year, the Belgian VAT authorities said they would uphold the full application of the Skandia case in Belgium (cfr. our earlier e-tax flash). The judgment makes the anti-abuse measure of article 19bis of the VAT Code redundant so that the government proposed to have it removed.

 

The law will enter into force 10 days after its publication in the Belgian Official Gazette.

Ceiling VAT exemption for small businesses raised to 25.000 EUR

The third law increases the ceiling for the VAT exemption for small businesses from 15.000 to 25.000 EUR. The VAT payers whose annual turnover in Belgium does not exceed 25.000 EUR can benefit from a VAT exemption for their supplies of goods or/and services.

This increase will probably enter into force as from January 1, 2016, as the European Council has already authorized it.

© 2017 KPMG Central Services, a Belgian Economic Interest Grouping ("ESV/GIE") and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative ("KPMG International"), a Swiss entity. All rights reserved.

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