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Belgium: VAT considerations for services provided by Belgian companies to UK customers

Belgium: VAT considerations

What might be the value added tax (VAT) treatment of consultancy services provided by Belgian companies to non-taxable clients established in the United Kingdom in light of Brexit?

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The EU and UK have negotiated a transitional period that suspends the legal effects of Brexit until 31 December 2020. This transition period is intended to allow companies to anticipate implications of Brexit on their activities—including in terms of VAT.


Current location rules - services provided to non-taxable customers outside the EU

As a general rule, a service provided to a non-taxable person (individuals, public bodies, passive holding companies, etc.) is located, from a VAT point of view, in the country where the service provider is established.

However, there are exceptions to this rule—such as when certain "intellectual or intangible" services (listed exhaustively) provided to a non-taxable person that is established outside the EU. The service is then located in the country where the customer is established. This can apply to advertising services and also to services provided by advisers, engineers, consulting firms, lawyers, accountants, and others providing similar services, as well as data processing and the provision of information.

Therefore, consider consulting services provided by a Belgian professional to an individual residing in London. From a VAT point of view:

  • Until 31 December 2020, these services are “located” in Belgium (place where the service provider is established). Belgian VAT is therefore due and must be invoiced in addition to the amount charged for the services.
  • Beginning 1 January 2021, following Brexit, these services are now deemed located in the United Kingdom (the place where the individual is established). Belgian VAT can therefore no longer be invoiced to this customer.

This example illustrates what would be the Belgian VAT treatment only. For the services to be subject to VAT in the UK, the law in the UK must provide for this treatment.

Read an August 2020 report (French) prepared by the KPMG member firm in Belgium

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