Belgium clarifies documentary proof for intra-community VAT exemption

Thu 28th Nov 2013

The Belgian VAT office has been forced to change its guidance on the requirements for the application of the VAT exemption on intra-community supplies.

Reverse charge simplifies EU VAT compliance

Under the EU VAT Directive, a number of conditions are set out to enable suppliers of goods or services to not charge VAT when they provide taxable supplies to companies in other EU member states.  The burden for reporting the VAT falls onto the customer who does a matching ‘sale’ and ‘purchase’ in their domestic VAT return.

This use of the reverse charge for VAT helps to reduce the amount of cross-border VAT compliance and recovery delays.

The conditions for the use of the reverse charge include:

  • The supplier must verify that the customer has an up-to-date VAT identification number.  This can be done by entering the supplied VAT number on the EU-operated VIES checking website.
  • The supplier must obtain documentary evidence (shipping papers) that the goods left his/her home state for another EU-member state

European court case forces VAT intra-community change

However, Belgium had been insisting on all conditions being met simultaneously.  This has now been changes following a ruling at the European Court of Justice in July 2012, the highest court of appeal on EU legislation.  In the case, the Belgian authorities asserted that the supplier did not have a valid VAT number of the customer (even though it had actually been retro-actively removed) and that on this basis alone the conditions for the reverse charge had not been met.