Belgium: Changes to the reverse-charge mechanism for immovable property

Reverse-charge mechanism for immovable property will apply to every taxable customer subject to the filing of periodic VAT returns

Immovable property

The reverse-charge mechanism for immovable property will apply to every taxable customer subject to the filing of periodic value added tax (VAT) returns in Belgium beginning 1 January 2023. This also includes the taxable customers established outside Belgium, regardless of whether they are registered for VAT in Belgium through a fiscal representative or whether they only hold a direct VAT identification in Belgium without a fiscal representative.

Up until now, the reverse-charge mechanism was only applicable when the foreign taxable customer was identified for VAT purposes in Belgium via a fiscal representative. In other words—reverse charge did not apply to foreign taxpayers merely holding a direct VAT registration in Belgium.

Customers not subject to periodic VAT filings but that do have a Belgian VAT number that they communicate to their supplier must also notify the latter of the fact that they do not meet the requirements for the application of the reverse-charge mechanism (e.g., customers subject to the VAT exemption scheme for small businesses hold a VAT number but do not file periodic VAT returns).

Finally, the supplier must also include a specific reference on its sales invoice for the situation when the customer failed to mention that they are not filing periodic VAT returns and are therefore not entitled to benefit from the reverse-charge mechanism. The purpose of that invoice reference is to inform the aforementioned customer of its personal liability for the payment of the VAT, fines, and penalty interest in such situations. Suppliers may want to always mention this reference on its invoice in case its customer communicates a VAT number and the reverse-charge mechanism is applied.

Read a November 2022 report prepared by the KPMG member firm in Belgium


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