Tax Insights December 2021 - Recent VAT developments

6% VAT on re-construction
Extended beyond 2022 and to include victims of flooding
VAT certificate abolished

The VAT administration allows the application of the reduced 6% rate for demolition and reconstruction for private residences affected by the floods. Although there is no demolition by the builder himself, destruction by flooding is equivalent to demolition. Even if construction is (to be) carried out on another plot of land, one can benefit from the reduced rate, provided the other conditions are met. 

Moreover, the administration has abolished the certificate for the application of the reduced VAT rate for renovation works in the context of administrative simplification (replaced by a standard declaration on the invoice).

At the European level, an agreement was reached at the beginning of December to modernise the list of goods and services for which reduced VAT rates are allowed, allowing Member States to react quickly to exceptional circumstances, such as pandemics or natural disasters.

These changes will allow Belgium to extend the application of the reduced VAT rate of 6% for demolition and reconstruction works beyond 31 December 2022.

6% FOR E-BIKES

Furthermore, the application of the reduced VAT rate of 6% on e-bikes can now be implemented.

MEDICAL VAT EXEMPTIONS: TOLERANCES FORESEEN

The new scope of the VAT exemption for medical services will take effect on 1 January 2022. 
In order to allow professionals to prepare for this (i.e. VAT identification, submission of periodic VAT returns and VAT adjustment of deducted VAT), transitional arrangements will be granted.

VAT EXEMPTION FOR TRANSPORT SERVICES DIRECTLY LINKED TO EXPORTS

The VAT exemption for transport services directly linked to the export of goods will be limited to transport carried out in the relation between the transport company and the exporter of the goods or the consignee, and no longer in any previous relations (i.e. subcontracting). The entry into force is postponed until 1 April 2022 (instead of 1 January 2022).

ONLINE EVENTS

The provision of access to events or conferences that are virtually attended, streamed or otherwise made available virtually will not (any longer) be subject to VAT in the Member State where the event or conference actually takes place, but where the participant is established.

If you have any questions regarding this topic, don’t hesitate to contact our RSM Belgium | Tax team ([email protected]).

RSM Belgium | Tax

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