- Purpose of the Circular: The Circular clarifies the Belgian tax administration’s position on the VAT taxation location for the provision of company vehicles to employees in cross-border situations, particularly in light of the EU Court of Justice ruling in Case C-288/19 (QM) from January 20, 2021.
- Definitions and Scope: It defines “company vehicles” as those used by a business and clarifies that cross-border situations occur when either the company’s establishment is outside Belgium with the employee residing in Belgium, or vice versa. The Circular emphasizes that these situations differ from purely national contexts.
- Conditions for VAT Applicability: The Circular outlines that for VAT to apply under Article 56 of the VAT Directive, the provision of a vehicle must be under consideration (i.e., payment) and must involve rental services other than short-term rentals. Specific criteria regarding usage rights and payment for the vehicle are detailed.
- VAT Assessment and Compliance: The Circular provides guidelines for determining the VAT assessment base and compliance obligations for companies when the place of taxation is in Belgium. This includes how to calculate normal value and the necessary declarations for VAT payment.
- Implementation and Transitional Provisions: Effective from September 1, 2023, the Circular replaces previous guidelines and specifies that companies may have to regularize VAT obligations from July 1, 2021, onward. It also indicates that businesses registered in Belgium must comply with these rules, including using the One Stop Shop (OSS) system for reporting VAT in cross-border cases.
Source Fisconet
See also
