VAT administration updates its position on the
VAT status of professional associations
The Belgian VAT administration has published a new circular
letter1 on the scope of the VAT exemption2
of professional associations rendering certain services in the
collective interest of their members.
The VAT administration does not fundamentally change its
previous position, but provides an update which takes into
account the case law of the European Court of Justice and the
evolution of the activities of professional associations in the
past decades.
Membership fees
As it was already the case, membership or subscription fees
must be fixed in accordance with the Articles of Association and
paid by members. Services supplied for the benefit of a few or
all members at a price separate from the membership fee do not
fall within the scope of the exemption.
The organization must defend and represent the collective
interests of its members
The main objective of the professional organization must be
to defend and represent the collective interests of its members,
in so far as it provides members with a representative voice and
strength in negotiations with third parties (such as the
European institutions). In order to determine the main objective
of the organization, all its services must be analyzed, taking
into account their relative importance and elements such as
their nature, the quality of the association’s members, the
members’ goals etc.
The new circular also stipulates that services supplied
individually to its members, instead of carried out globally, are
VAT taxable services. However, the circular also specifies that an
individual service supplied to a member in the framework of its main
objective and from which all members benefit, is exempt.
When does an organization meet the above conditions?
International or national associations that represent a specific
sector of activity and that defend its interests towards authorities
notably with the objective of influencing policy making and the
decision-making processes, fall within the scope of the exemption.
The pursuit of these goals may require carrying out surveys,
publications or meetings that are also VAT exempt.
On the contrary, the new circular letter stresses that an
organization supplying services in order to promote the economic or
commercial interests of its members by rendering them services such
as advices, networking, research and development activities, legal
opinions and administrative guidelines, representation during events,
advertising, does not fall within the scope of the exemption and is thus VAT taxable.
The new circular points out that, in exceptional circumstances,
an organization may perform different activities making it
impossible to identify a predominant activity. In such a case, the
organization can partially deduct VAT.
Entry into force
The new circular letter has entered into force on January 1,
2012. Concerning the past, the circular letter states that all
organizations that have respected the previous rules or that have
anticipated the new circular letter should not have an issue.
1 Circular letter no. E.T.121.844 (AAFisc
nr. 1/2012) of 03.01.2012 replacing circular letter no. 12 of
29.12.1986 and all subsequent administrative VAT decisions.
2 Article 44, §2, 11° VAT Code.
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