- Belgian VAT authorities have issued circular 2023/C/72 regarding the VAT treatment of company cars provided to employees residing in Belgium by foreign employers, including those from Luxembourg.
- The circular states that employers should assess their car policies to determine if they fall under the new rules and take necessary action.
- The European Court of Justice (CJEU) ruled that providing a car to an employee is considered as hiring a means of transport and is subject to VAT in the Member State of residence of the employee.
- The circular provides detailed rules on how to apply VAT in the specific case of foreign employers putting vehicles at the disposal of Belgian resident employees.
- Concerned persons include employees, managers, and directors of companies who have a current account with the company.
- The taxable basis is the value of the payment by the employee or the normal value, which is based on the expenses made by the employer.
- The circular reminds that CJEU decisions would imply that the principles should be in force from 1 January 2013 and that Belgian VAT is due from this date when the employer-provided car meets the conditions of the QM v. Finanzamt Saarbrücken decision.
- However, 1 July 2021 is fixed as a more realistic pivot date.
- Employers should assess if their employer-provided company cars for employees residing in Belgium are subject to Belgian VAT.
Source Deloitte
See also
