Brexit - Supply of goods from the United Kingdom to Belgium

Impact of Brexit on the VAT treatment of supplies of goods from the United Kingdom to Belgium

  • What changes?

    The main consequence of Brexit on supplies of goods will be the restoration of tax borders between the United Kingdom (*) and the European Union. This will result in the end of the intra-Community rules currently applicable to the movement of goods from the United Kingdom to the EU.

    • The supply of goods by a taxable person in the United Kingdom to a client in Belgium which is a taxable person (B2B) will no longer be treated as an intra-Community acquisition of goods in Belgium but as an import.
    • The supply of goods by a taxable person in the United Kingdom to a client in Belgium which is not a taxable person (B2C) will no longer be subject to the distance selling scheme but will be treated as an import in Belgium.

    Belgian taxable persons acquiring goods in the United Kingdom (*) are in particular advised to familiarize themselves with the customs procedures and formalities regarding import of goods and to take account of VAT payment upon importation of goods.

    (*) See, however, the special status of Northern Ireland

  • Will the import of goods be subject to VAT in Belgium?

    The import of goods in Belgium is in principle subject to Belgian VAT when the goods are put into free circulation from a custom’s point of view. VAT is not due as long as the goods are placed under a custom’s suspensive arrangement (for instance under customs warehousing arrangements).

    The VAT due on import must be paid to customs unless you have an authorization to defer the payment (ET 14000). In such a case, the import VAT must be paid in the periodic VAT returns and can be deducted in the same return to the extent of your right to deduct input VAT.

    It must be noted that there are some VAT exemptions applicable at import (see Commentaire TVA - Chapitre 8 - Section 5 for more information in this regard). Notably, there is a VAT exemption for the import of goods followed by an intra-Community supply (scheme 42). There is also a VAT exemption for goods of low value (goods’ value lower than 22 euro) applicable notably in the e-commerce field.

    There are also VAT exemption for some supplies of services related to the import of goods in the EU (see Commentaire TVA - Chapitre 8 - Section 2 - Titre 2 - Rubrique B  and Section 6 - Titre 3 - Rubrique A for more information about these exemptions). For all these exemptions, the United Kingdom (*) must be considered as a territory outside the Community. 

    It should also be noted that the Withdrawal Agreement provides that where goods had been transported or dispatched from one of the Member States to the United Kingdom before the end of the transition period and are returned in an unaltered state from the United Kingdom to the EU after the end of the transition period, these movements are in principle considered as re-imports exempted from VAT.

     (*) See, however, the special status of Northern Ireland.

  • Who is the person liable to pay VAT at import?

    The person liable to pay VAT at import is the person acting as the addressee upon import. It is generally the client in Belgium. The supplier can also have this status:

    • If the client in Belgium takes the status of addressee upon import, he/she will be the person liable to pay VAT at import. The supply of goods which is carried out by the supplier in the United Kingdom is considered having taken place outside the Community (i.e. in the United Kingdom). No Belgian VAT is due on this supply.
    • If, on the contrary, the supplier in the United Kingdom takes the status of addressee upon import, he/she will be the person liable to pay VAT at import (that is always the case when it concerns a supply with installation or assembly carried out by the supplier or on his/her behalf). The supplier must register for VAT purposes in Belgium (i.e. through an individual identification with VAT representative or a global representative). The supply of goods that he/she carries out afterwards is considered as having taken place in Belgium and the Belgian VAT is due on this delivery (with or without the application of the reverse charge mechanism depending on the VAT status of the purchaser).
  • What will be my VAT obligations as person liable to pay VAT?

    You must (*):

    • file an import declaration pursuant to the customs rules;
    • pay the VAT due on the import when the import declaration is validated by customs;
    • if you have an authorization ET 14000 to defer the payment of VAT, the VAT due at import must be paid through the periodic VAT returns related to the period during which the tax has become due (taxable basis in boxes 81, 82 or 83 and 87 and VAT due in box 57). This VAT can be deduced in box 59 to the extent of the taxable person’s right to deduct input VAT.

    See Commentaire TVA - Chapitre 4 for more information in this regard.

    (*) See, however, the special status of Northern Ireland.

  • What about goods shipped to Belgium on consignment, at sight or to be put into storage?

    As regards the goods shipped to Belgium on consignment, at sight or to be put into storage by a taxable person in the United Kingdom, the simplification scheme actually applicable in Belgium will no longer be in effect for the aforementioned transactions, considering that the United Kingdom will no longer be part of the EU. Therefore, the export/import rules will be fully applicable (*).

    The goods already present in Belgium before Brexit qualify as EU goods which do not have to be subject to an import. When the supply of goods (the transfer of property in this case) is carried out, the purchaser in Belgium must declare the Belgian VAT due in its VAT returns by application of the reverse charge mechanism.

    (*) See, however, the special status of Northern Ireland.

  • What about supplies of goods for which dispatch or transport from the United Kingdom to Belgium will start before the end of the transition period and ends thereafter?

    The Withdrawal Agreement provides that when the dispatch or transport begins before the end of the transition period (set at 31 December 2020) and ends thereafter, intra-Community rules continue to apply.

    Therefore, the supply is considered an intra-Community supply/acquisition of goods or is subject to the distance selling scheme according to the current rules.

    After the end of the transition period, those ongoing movements of goods will, however, have to be presented to customs at the border of the United Kingdom and of the EU. Customs authorities may request the importer to prove, by means of a transport document, that the dispatch or transport started before the end of the transition period. The reporting obligations related to these transactions provided for in the VAT Directive will still apply.