Belgium: Circular provides guidance for VAT on e-commerce transactions

The Belgian tax authorities issued guidance (Circular 2021/C/72) concerning the treatment—for value added tax (VAT) purposes—of cross-border business-to-consumer (B2C) e-commerce activities.

The new circular (approximately 300 pages) implements the new VAT legislation relating to the remote (distance) sales of goods and certain cross-border B2C supplies of goods and services, as applicable beginning 1 July 2021. Accordingly, the circular’s effective date is also 1 July 2021.

The new VAT legislation for cross-border B2C e-commerce activities was enacted 2 April 2021 and was supplemented and complemented by a Royal Decree of 29 June 2021. Read TaxNewsFlash

The circular also implements the relevant EU legislation and, importantly, introduces the following changes:

• An extension of the existing simplified schemes within the MOSS-system (Mini One Stop Shop). Beginning 1 July 2021, intra-Community remote sales of goods and all services provided to foreign EU final consumers by EU suppliers as well as all services provided to final consumers by non-EU suppliers will be included. Due to the significant extensions of the MOSS-system, the system is now referred to as OSS (One Stop Shop).
• Elimination of the domestic thresholds for intra-Community remote sales, and introduction of a global EU VAT threshold for intra-Community remote sales of goods and telecommunication, broadcasting, and electronic services to final consumers. The global EU VAT threshold is set at €10.000.
• Introduction of a new scheme within the OSS-system (OSS import scheme) that allows for a simplified declaration and payment of the VAT in respect of remote sales of goods shipped from third countries or third territories.
• Repeal of the VAT exemption for the import of small consignments of maximum value of €22 of non-EU suppliers. This exemption is replaced by an import exemption of a maximum amount of €150 which applies only if the goods are imported under remote sales of goods from third countries or third territories, and are declared under the new simplified scheme of the OSS import scheme.
• Introduction of special arrangements outside the OSS-system for the declaration and payment of import VAT with respect to goods imported for final consumers under the remote sales of goods from third countries or third territories, when the VAT is not paid via the OSS import scheme.
• Introduction of new rules whereby the operators of electronic interfaces facilitating remote sales of goods, are in certain instances also are liable for the correct payment of VAT on remote sales effected through their interface.

In line with the new VAT legislation, Circular 2021/C/72 provides further details and clarifications about certain topics, including:

• Explanation of the legislative framework and definition of terms used
• Rules applicable to the remote sales of goods imported from third territories or third countries, with certain exceptions
• Rules applicable to the intra-Community remote sales of goods as well as certain domestic sales of goods
• Rules applicable to services supplied by VAT taxable persons not established in the EU or by VAT taxable persons established in the EU but not in the EU Member State of consumption, to final consumers

The circular, in principle, does not cover the VAT obligations relating to business-to-business (B2B) intra-Community supplies of goods, and B2B supplies of goods imported from third territories or third countries.

Read a July 2021 report prepared by the KPMG member firm in Belgium