Belgium must adapt its VAT legislation concerning long-term leasing of vehicles. As is prescribed by the VAT package approved in 2008 for non-business customers, the place of supply will shift to the place where the consumer is established, has his permanent establishment or usually resides, whereas the long-term lease is now (and still until the end of 2012) subject to VAT in the country where the lessor is established. As a consequence, from 2013 on, the lessor must charge VAT of the EU Member State of establishment of the consumer, i.e. the place where the natural person is entered in the population register, even if the lessor is not established in that EU Member State.
This means that Belgian VAT will be due if the consumer is established in Belgium, regardless of where the lessor is established. In order to fulfill its legal obligations as VAT-able person, who is liable for the payment of the Belgian VAT, the lessor (which is established in the EU) has to register for Belgian VAT purposes. This will most likely decrease dramatically the often applied practice, which consists of leasing vehicles in Luxembourg at the lower local VAT rate of 15 percent.