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Belgian VAT regularisations to be done by foreign employers
Based on the judgment of the EU Court of Justice in the case C-288/19, QM, the Belgian VAT authorities updated their view on the VAT treatment of company cars provided by foreign employers to employees living in Belgium, including managers, directors of a company (see VAT circular letter 2023/C/72).
Direct impact
Foreign employers will have to review their car policies when putting company cars exclusively at the disposal of employees residing in Belgium, for a period of more than 30 days and against consideration. Indeed, they will become debtor of VAT in Belgium, if:
- the employee pays the complete contribution for the use of the provided company car;
- the employee gives up a part of its remuneration (salary) for the use of the car;
- a booking in the current account of the manager or director of a company is made as remuneration for the use of the company car;
- the putting at the disposal of the car is a part of a choice made by the employee of a salary plan;
- and if the car can also be used for private reasons.
As debtor of Belgian VAT, they will have to register for VAT purposes in Belgium and will have to file periodical VAT returns under a normal VAT registration in Belgium or through the “One Stop Shop registration procedure (OSS), in their jurisdictions.
VAT regularisation needed
Foreign employers not having paid Belgian VAT for the use of the company car to the Belgian VAT authorities will have to regularise, in principle, their past situation as from 1 January 2013.
Nevertheless, based upon the principles of good governance, the Belgian VAT authorities allowed a retro-active regularisation of the unaccounted for Belgian VAT on these company cars as from 1 July 2021, except for the situations where employees have paid a full contribution for the use of their company car.
In light of the above changes also Belgian employers having employees residing in other countries can be impacted in the same way in other EU countries.
Our VAT team is happy to assist with further questions on this matter via [email protected].
