Law & Numbers - VAT

VAT Package

25.01.2012

General Rules regarding Location of Services

VAT Package
(France, Luxembourg, Belgium)

General Rules regarding Location of Services

There are two categories of services:

• B2B: Business to Business
B2B =
• VAT taxable persons
• Exempted taxable persons (not applicable in Belgium)
• Partial taxable persons (not applicable in Belgium)
• Mixed taxable persons
• Non taxable legal persons identified for VAT purposes

•B2C: Business to Consumer
B2C =
• Private persons
• Non taxable legal persons not identified for VAT purposes
• Taxable persons receiving services for private use

For B2B services (established in two different EU countries)

GENERAL RULE

VAT will be payable in the country where the customer’s establishment is located.
VAT is to be paid by the Customer through the reverse charge system.

5 Exceptions

(1) Provision of services linked to real estate property
• VAT payable in the country in which the property is located

(2) Passenger transport services
• VAT payable in the countries, depending on the distances travelled

(3) Provision of services relating to culture, the arts, sports, science, education, entertainment or similar events
• VAT always payable in the country in which the service is provided

(4) Restaurants and catering
• VAT payable in the country in which the service is physically carried out
Catering aboard aircraft, boats or trains in the EU
• VAT payable in the countries of passengers’ departure

(5) Rental and leasing of means of transport
Short term (maximum 30 days, except for boats where the maximum is 90 days):
• VAT payable at the place where the means of transport is made available to the customer
Long term:
• VAT payable in the country where the customer’s establishment is located

In addition one Belgian and French Exception

(6) Travel agencies' services
VAT payable in the country where the travel agency's establishment is located (FTC, art. 259 A, 8)

For B2C services

GENERAL RULE

VAT payable in the country where the supplier’s establishment is located.

14 Exceptions

The 5 exceptions B2B
• Provision of services linked to real estate property
• Passenger transport services
• Provision of services relating to culture, the arts, sports, science, education, entertainment or similar events
• Restaurants and catering
• Short term Rental and leasing of means of transport

• Travel agencies' services (for France and Belgium)
+
(6) National and International transport of goods

• Where the transport takes place, proportional to the distances covered

(7) Intra-community transport of goods (between two EU Member States)
• VAT payable in the countries of departure

(8) Services associated with transport
• VAT always payable in the country where the service is provided

(9) Activities (Expertise) on movable property (Including special order work)
• VAT payable in the country where the principal transaction is carried out

(10) Provision of intermediary services
• VAT payable in the country where the principal transaction is carried out

(11) Services supplied electronically – E-business
• Until 31 December 2014
Outside the EU: VAT exempted
In the EU provided by an in-EU taxpayer: VAT payable in the country of the supplier
In the EU provided by a non-EU taxpayer: VAT payable in the country of the customer
• From 1 January 2015
VAT payable in the country of the customer

(12) Telecommunication, radio and television broadcasting services
• Until 31 December 2014
Outside the EU: VAT exempted
In the EU provide by an in-EU taxpayer: VAT payable in the country of the supplier
In the EU provide by a non-EU taxpayer: VAT payable in the country of use
• From 1 January 2015

VAT payable in the country of the customer

(13) Long term rental and leasing of means of transport

• VAT payable in the country of the service provider until 2012
• From 1 January 2013,
Pleasure Boat: Place where the means of transport is made available (for belgium if it is the same place as service provider’s establishment)
Other means of transport: country of the Customer (for Belgium also if the pleasure boat is made available for client in another place than the service provider’s establishment)

(14) The following services to non-EU buyers:
• Tranfers and assignments of copyrights, patents, licences, trade marks and similar rights;
• Advertising services;
• The services of consultants, engineers, consultancy firms, lawyers, accountants and other similar services, as well as data processing and the provision of informtaion;
• Obligations to refrain from pursuing or exercising, in whole part, a business or an afore-referred activity;
• Banking, financial and insurance transactions including reinsurance with the exception of the hire of safes;
• The supply of staff;
• The hiring out of movable tangible property, with the exception of all means of transport
• The provision of access to, and of transport or transmission through, natural gas and electricity distribution systems and the provison of other directly linked services


VAT payable in the country of the customer


For any questions concerning vat issues please contact :
Vincent Grandil (France)
Egon Schmitz (Germany)



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