Global

Details

  • Service: Tax, Global Indirect Tax, Global Compliance Management Services
  • Type: Regulatory update
  • Date: 9/12/2012

Belgium - VAT import-deposit system repeal; VAT exemption for non-profits 

September 12:  The Belgian government has decided to repeal the regime for a value added tax (VAT) deposit, required to obtain a reverse charge of import VAT.

Reason for change

When goods are imported in Belgium, the amount of import VAT is immediately due to the Belgian customs authorities—at the moment of the physical import. This amount of import VAT can then be recovered through the Belgian VAT return system.


However, several months may pass before the import VAT can be recovered—effectively resulting in a “pre-financing” of import VAT. To avoid this pre-financing, the taxpayer can, if certain conditions are met, apply for an “E.T. 14.000” import license (which sets up a system allowing the taxpayer to pay the import VAT through the periodic VAT return (grid 57) and to immediately report it as deductible VAT).


Up to now, this import license has only been granted if the taxpayer makes a deposit of 1/24th of the amount of VAT paid on actual imports for the prior four calendar quarters.


The Belgian government proposes to repeal this VAT deposit system in order to address the competitive disadvantage that the system creates for Belgian ports. For example, in the Netherlands, no similar deposit is required to obtain an import license (thus, a VAT advantage for the Dutch ports).


Read an August 2012 report prepared by the KPMG member firm in Belgium: Deposit VAT-import license will be abolished

VAT exemption for lobbying activities of non-profits

A circular letter regarding the scope of the VAT exemption for lobbying activities performed by non-profit associations—effective 1 January 2012—clarified the VAT status of certain activities of non-profit associations.


Beginning in 2012, the VAT exemption only applies to non-profit associations, provided that their services are financed by “statutory” membership fees. Consequently, all services rendered by these associations in exchange for a separate (i.e., non-statutory) payment are excluded from the scope of the VAT exemption, even if concerning otherwise eligible lobbying activities.


Moreover, the services must be rendered in the collective interest of the members of a non-profit association involved in the lobbying activity. Also, services rendered on an individual basis can benefit from the VAT exemption, provided they are related to lobbying conducted by the non-profit association for the benefit of its members.


Read an August 2012 report prepared by the KPMG member firm in Belgium: VAT exemption for lobbying activities and non-profit associations




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