Concept of a Fixed Establishment: the Belgian approach

The administrative guidance makes a clear distinction between the concept of VAT FE for ‘outgoing transactions’ and for ‘incoming transactions’:

• From an outgoing perspective, a foreign taxable person shall be considered as having a local VAT FE in Belgium when the following cumulative conditions are met:
  • There is a presence in Belgium of an establishment or any other installation (i.e., an office, a branch, a warehouse, a plant, etc.).
  • The establishment is characterized by a sufficient degree of permanence and a suitable structure in terms of human and technical resources. The Belgian tax authorities presume that such is the case when the establishment is led by a person who can legally bind the company toward clients and suppliers.
  • The human and technical resources allow that establishment to supply goods or services on a regular basis.
• From an incoming perspective, the Belgian authorities refer to the broader EU definition contained in Article 11.1 of the VAT Implementing Regulation, according to which a VAT FE is considered to be:

[…] any establishment, other than the place of establishment of a business, characterised by a sufficient degree of permanence and a suitable structure in terms of human and technical resources to enable it to receive and use the services supplied to it for its own needs.

The Austrian Administrative Supreme Court (VwGH), 29.4.2003, 2001/14/0226 interpreted the VAT FE in accordance with the CJEU jurisprudence, by emphasizing the importance of a sufficient level of human and technical resources, enabling it to receive the services supplied to it and use them for its own business needs.

A VAT FE under Austrian case law is characterized by a sufficient degree of permanence and a suitable structure in terms of human and technical resources, to enable it to receive and use the services supplied to it for its own needs.

Since the Austrian tax authorities explicitly and closely relied on the CJEU jurisprudence in Berkholz, C-168/84 and Planzer, C-73/06, it can reasonably be expected that they will also follow the holdings in Berlin Chemie, C-333/20.

See also

• Growing trend whereby a foreign parent company to have a fixed establishment in Belgium through its daughter company
• New ECJ VAT case: C-232/22 (Cabot Plastics Belgium): Belgian VAT fixed establishment for a Swiss principal, through its affiliated Belgian toll…
• “Tolling manufacturer = VAT FE of principal?” Belgian Court of Appeal refers to ECJ!
• Established or Not? Urgent EU VAT clarity needed!
• Fixed establishment through an affiliate company in Belgium? The Court of Appeal of Liège affirms
• AmCham Belgium urges the Belgian tax authorities to issue an updated circular on Fixed Establishments
• The (witch) hunt for the VAT fixed establishment
• ECJ Danske Bank – Services between head office and branch attract VAT

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