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New Belgian VAT Rules Applicable from 1 January 2010
Following to the Council Directive 2008/8/EC, the Belgian government decided to review the rules on the place of supply of services.
From 1 January 2010, for all supplies of services, the place of taxation will, in principle, be the place where the actual consumption takes place.
B to B transactions (Business to business)
For the supply of services to taxable persons, the general rule with respect to the place of supply of services is based on the place where the recipient is established rather than where the supplier is established.
For these transactions, the reverse charge mechanism is applicable. This means that where a taxable person receives services from a person not established in the same Member State, the taxable person (the customer) is liable for the payment of the VAT to the tax authorities.
B to C transactions (Business to Consumer)
Where services are supplied to non taxable persons, the general rule continues to be that the place of supply of services is the place where the supplier has established his business.
If a company not established in Belgium (but in another Member State) performs a supply of services to a company established in Belgium, the foreign company will have the obligation neither to register for VAT purpose in Belgium nor to fulfill all the obligations linked to a such registration (VAT returns, VAT payments etc).