Contractors that perform work on immovable property in Belgium for VAT taxable customers often have to apply a VAT reverse charge regime to their outgoing invoices. This scheme entails that the VAT due must not be paid by the contractor, but by the customer via his periodic VAT return in Belgium.
From 1 January 2023, this reverse charge mechanism will be extended and there will be an additional invoice requirement that must be taken into account. The new rules are a simplification of the reverse charge mechanism. We explain this change in more detail below.
The scope of the reverse charge mechanism for work on immovable property depends on the status of the service provider and the customer:
This condition for the reverse charge regime does not change. The situation in which the work on immovable property is carried out by a foreign (non-established) contractor will never fall under the reverse charge regime for work on immovable property.
the customer, as from 1 January 2023, must be a VAT taxable person who is obliged to submit periodic VAT returns in Belgium. The customer must therefore only have a Belgian VAT number and submit VAT returns on a quarterly or monthly basis.
What has changed then? It is no longer relevant whether the customer is established in Belgium or has an individual fiscal representative, or not. Before 1 January 2023, the reverse charge regime for work on immovable property was excluded for foreign VAT taxable persons with a direct VAT registration in Belgium. This changes. From now on, the reverse charge regime for work on immovable property will also apply to foreign VAT taxable persons with a direct VAT registration in Belgium.
2. Additional invoice requirement
Invoices to which the reverse charge regime for work on immovable property applies, must bear the following invoice statement from 1 January 2023 :
'Reverse charge. In the absence of a written dispute within one month of receipt of the invoice, the customer shall be deemed to acknowledge that he is a taxable person obliged to submit periodic returns. If the condition is not fulfilled, the customer shall be liable in respect of that condition for the payment of the VAT, interest and fines due.'
The customer who does not meet the conditions to apply the reverse charge regime for work on immovable property must inform the contractor accordingly. If the customer does not do this, he will be liable to the Treasury for the payment of the VAT, interest and fines due. In this case, the contractor is therefore relieved from his liability for the payment of VAT (except in the case of fraud).