VAT package

The draft bill is available on www.lachambre.be (DOC 52K2157).

The new rules contain a series of changes, which will be introduced from 1 January 2010 with further changes up to 2015. The changes represent the most far-reaching changes since the introduction of the internal market in 1993 and will affect all enterprises which supply or purchase cross-border services.

The following changes need to be highlighted:

• from 1 January 2010, the rules regarding the place of supply for services will change dramatically. The most important change is that a distinction has to be made between business-to-business (B2B) and business-to-consumer (B2C) transactions.
  
  For B2B-transaction, the default rule will be that these transactions are taxable in the country where the recipient is established. This change is accompanied by a broader application of the reverse charge mechanism and the obligation to report the intra-Community supply of services in a recapitulative statement. In practice, the application of local VAT of the supplier for cross-border B2B transactions should become the exception.
  
  For B2C-transactions, the cross-border services will be taxable in the country where the supplier is established.

• from 1 January 2010, the taxable person whose is not established in the Member State of refund shall address an electronic refund application to his own Member State. The new rules are aimed at simplifying the refund procedure.
•  from 1 January 2010, new thresholds will apply to determine the periodicity to submit the periodic return and the recapitulative statements.

For further information, please feel free to contact danny.stas@tiberghien.com