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21.03.2022

Update: End of VAT exemption for transport services subcontracted linked to exports

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On November 4, we announced that, as a result of a European judgment, the VAT exemption for transport services in relation to exports can soon only be applied to the relationship between the transport company and the exporter of the goods and not to any previous relationships, i.e. when the transport company uses a subcontractor for the transport.

If a transport company uses a subcontractor to provide the goods transport service, the service provided by the subcontractor can no longer be exempted from VAT.

On 24/11/2021, the effective date was postponed to 01/04/2022. This decision was published as an addendum to the initial circular. However, on 15/03/2022, it was again decided to postpone the entry into force, this time final to 01/09/2022. The new date will give the industry more time to adjust.

 

An example to clarify:

A Belgian taxable company A has sold goods to a customer established in the United Kingdom (country established outside the EU). A uses transport company X to transport the goods to its customer, i.e. it is an export. X in turn relies on transport company Y to provide the transport service. Transport companies X and Y are both Belgian taxable companies.

The transport service that Y provides to X as a subcontractor is subject to 21% Belgian VAT as of 01/09/2022. Until this date, the VAT exemption of article 41, §1, first paragraph, 3° of the VAT Code applies.

The transport service provided by X to A is also subject to Belgian VAT, but is exempted on the basis of article 41, §1, first paragraph, 3° of the VAT Code.

 

See below our previous article:

 

Do you have questions about the end of the VAT exemption? Then contact us here or make here an appointment with our tax advisors.