If you as a taxpayer perform a service, which is taxable for VAT in Belgium, then you as a service provider must pay this VAT via your VAT declaration. However, if the work is in an immovable state, then in principle the VAT must always be passed on to the customer when the customer submits periodic VAT returns in Belgium. There are currently a number of exceptions to this.
As of 01/01/2023, these exceptions no longer apply and any customer filing VAT returns in Belgium must always pay VAT. This change also entails some practical changes.
We provide below the impact of these changes.
Situation on today
Currently, for work on real estate, which is taxable in Belgium, the VAT due on this service must be passed on to the customer when the following conditions are met:
- As a service provider, you are a taxpayer established in Belgium and required to file VAT returns or you are a taxpayer established abroad and you have appointed a liable representative in Belgium and;
- Yourbuyerconcerns a taxpayer established in Belgium who is required to file VAT returns or is a taxpayer established abroad who has appointed a liable representative in Belgium.
Situation as of 1/01/2023
As of 01/01/2023, this principle will change with regard to the capacity of the purchaser of immovable works. From then on, the VAT must be transferred to the customer in all cases where the customer files periodic declarations in Belgium.
In concrete terms, this means that a foreign company, which has obtained a VAT number in Belgium through direct identification (majority of cases), will from then on be liable to pay the VAT instead of the service provider.
Thus, if you perform work in immovable state in Belgium for foreign companies with a direct VAT registration, then as of 01/01/2023 you will have to transfer the VAT to the customer on your invoice here as well.
Mandatory customer notification and invoice entry
The principle of "reverse charge VAT" assumes that the customer is a taxable person liable to file VAT returns in Belgium. If this is not the case, then the customer can also not pay the VAT instead of the supplier. This implies that, as a service provider, you must also be aware of your customer's VAT liability in order to invoice correctly.
In practice, however, this is not always evident. In order to accommodate the service provider in this and encourage the customer to communicate the correct data in a timely manner, as of 01/01/2023, the customer will be required to communicate, in the case of a work in immovable property, that he/she does not submit VAT returns.
In addition, from then on, as a service provider you must always include the following statement on your invoice when you reverse the VAT to your customer:
- Reverse charge. In the absence of a written dispute within a period of one month from the receipt of the invoice, the customer shall be deemed to acknowledge that he is a taxpayer liable to submit periodic returns. If that condition is not fulfilled, the buyer shall be liable for the payment of the tax, interest and fines due with respect to that condition.
If the customer does not dispute the invoice within one month of receipt, then as a service provider you are deemed to be released from liability as far as the payment of VAT is concerned.
So if you operate in the construction industry, make sure you have an updated invoice as of Jan. 1.
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