01/12/2017

New VAT rules concerning place of supply of certain transport services

Royal VAT Decree n° 57 has been replaced by a new Royal VAT Decree n° 57 aiming to simplify the VAT treatment of B2B freight (and related) services in cases where the transport takes place (partially) outside the EU or where the customer is not established in the EU. It entered into force on 23 November 2017.

Under the old Royal VAT Decree n° 57 freight (and related) services that are deemed to be located in Belgium for VAT purposes are considered to be outside the scope of VAT to the extent that the transport takes place outside the EU. Hence, a calculation in function of the distances covered outside the EU had to be made.

According to Art. 1, §1 of the new Royal VAT Decree n° 57, the freight (and related) services will only be out of scope of VAT when the entire transport takes place outside the EU.

Besides that, based on Art. 1, §2 of the new Royal VAT Decree n° 57, the freight (and related) services that are deemed to be located outside the EU for VAT purposes (because the customer is a taxable person established outside the EU) are considered to be located in Belgium for VAT purposes, but only when the transport entirely takes place in Belgium.

It is thus recommended for businesses that are active in supplying or purchasing international transport services to reassess the VAT treatment of their freight (and related) services. Please reach out to the Loyens & Loeff Indirect Tax team should you need any assistance in this respect.