The impact of Brexit on Belgian VAT registration
Before a foreign company can carry out taxable transactions in Belgium, this company must, in principle, register for VAT purposes in Belgium. A different regime applies depending on whether the foreign company is established in the EU or outside the EU.
Under the present circumstances, UK companies have the choice to opt for either a direct VAT registration in Belgium without a fiscal representative or a VAT registration with the appointment of a fiscal representative in Belgium.
However, the Brexit provides for a substantial change regarding the VAT registration.
Since the United Kingdom left the European Union on 31 January 2020, the current scheme will only apply until the end of December 2020 (transitional period). As of 1 January 2021, the United Kingdom will be considered a third country, implying that UK companies must comply with the VAT obligations in relation to non-EU countries.
Hereby, UK companies are required to appoint a fiscal representative established in Belgium when carrying out taxable transactions in Belgium.
In addition, UK companies which are already registered with a direct VAT identification in Belgium, need to comply with the so-called “switch”. This entails that UK companies must convert their direct VAT identification into a VAT registration with the appointment of a fiscal representative in Belgium.
This should be done at the latest before March 2021, but preferably as soon as possible before the Brexit enters into force, as the procedure may take some time due to the complexity and strictness of the formalities for a VAT registration with a fiscal representative in Belgium.
Also in the opposite sense, the Brexit includes far-reaching implications regarding Belgian companies and their VAT obligations in the UK.
As the trusted advisor of your company, Van Havermaet can assist you with the application for or the conversion into a VAT registration with the appointment of a fiscal representative in Belgium. We have extensive experience in guiding companies in the field of VAT, as well as performing as a fiscal representative for foreign companies.
If you have any questions on this subject, please feel free to contact Hans Philips.