Appointment of a VAT representative in Belgium: new guarantee rules
In order for a non-EU established taxable person to be able to perform taxable transactions in Belgium for which he is the VAT debtor, this taxable person must in principle register for a Belgian VAT number with the appointment of a fiscal representative established in Belgium. For EU established persons the appointment of a fiscal representative is not compulsory but optional.
The appointment of a fiscal representative shall be accompanied by a guarantee to ensure the payment of all sums due by the represented taxable person by way of VAT, fines, interest and costs.
The rules on the guarantee arrangement have recently been amended. These legislative amendments also apply to the appointment of global representatives, as well as to intermediaries within the meaning of the IOSS regulation.
Applicable to whom?
The appointment of a fiscal representative is only mandatory for non-EU established taxable persons who carry out taxable transactions in Belgium of which they are the VAT debtor.
Such appointment is not mandatory and often a direct VAT identification is sufficient if:
- The co-contracting party is the debtor of VAT on the taxable transaction carried out in Belgium (reverse charge);
- The taxable person is established in a third country with which the EU has concluded an agreement on mutual assistance similar in scope to Council Directive 2010/24/EU and Regulation (EU) No 904/2010. This is the case for Norway and, according to the current state of affairs, also for the UK.
- The non-EU established taxable person has a fixed establishment in Belgium which carries out the taxable transaction in Belgium.
The amount of the guarantee
The amount of this guarantee:
- is set at 10% of the balance of the Belgian VAT due, for a period of twelve calendar months resulting from VAT returns which were filed during the previous calendar
In case it is not possible to establish a one-year reference period for the determination of this guarantee, the amount of the guarantee shall be determined provisionally by the VAT authorities on the basis of the estimations of the fiscal representative. Subsequently, the guarantee will then be finally determined on April 30 of the following year.
- And must be at least 7.500 EUR and no more than 1.000.000 EUR.
- The amount of the guarantee shall be fixed for a period ending on December 31 of the second year following the year in which the guarantee has been determined.
- The guarantee must be issued in favour of the Belgian VAT authorities.
The amount of this guarantee shall be reviewed every three years in function of an increase or decrease of the VAT due.
- The VAT authorities will in principle always proceed with a revision in case the amount of the guarantee increases.
- On the other hand, a revision can be requested by the taxable person or its fiscal representative in case of decrease of the guarantee.
- In any case, no revision is made when the change in the amount of the guarantee is less than 10%.
The form of the guarantee
The guarantee can be provided in the form of:
- A cash deposit on a special bank account of the Belgian authorities
- Securities in favour of the Belgian Authorities
- A personal guarantee by an insurance company, a bank or a private savings bank (bank guarantee), which carries is allowed to carry out its activity in Belgium (*).
(*) This refers to financial institutions which, in accordance with Belgian regulations, may carry out their activities on Belgian territory. In accordance with the European rules on freedom of establishment and freedom to provide services, it does not necessarily concern an institution established in Belgium.
If you are a non-resident taxable person that needs to register for VAT in Belgium, we can take care of the VAT registration, become your VAT representative, and comply with all VAT formalities. We have extensive experience in representing foreign companies for VAT purposes in Belgium.