Does your company have commercial relations with European partners? Are some of your customers located in another EU country? You are, without doubt, concerned by intra-community VAT. This tax, introduced in 1993 to standardize the tax system in Europe, meets strict rules.
How it works?
- Intra-community VAT on sales of goods.
- Intra-community VAT and the provision of services.
- Intra-community VAT for sales to non-taxable persons (individuals)
Which companies are subject to the intra-community VAT regime?
Intracommunity VAT on sales of goods
Principle of intra-community VAT: goods sold from a member country of the European Union (intra-community deliveries) to buyers established in another member state are exempt in the country of departure. In return, the purchase (intra-community acquisition) is taxed in the country of destination, according to the conditions in force in that country. Using the sales tax calculator is important there.
Your company, established in Belgium, buys goods from a Luxembourg company. This is an intra-community acquisition. You will receive an invoice without VAT provided you have provided a valid intra-community VAT number to your suppliers. Since delivery takes place in Belgium, you are then liable for Belgian VAT . You indicate the amount to be paid in your VAT return in Belgium.
Note: in some cases, this VAT is deductible. This is the case in France, where VAT is deductible upon receipt of the goods. For this, you must respect the invoicing rules: mention of the price excluding tax and indication of the intra-community identification numbers of the supplier and the purchaser. Check with the competent administration.
Your company delivers its products to a partner in France. It then makes an intra-community delivery . You must issue an invoice without VAT. Your business does not pay VAT provided certain conditions are met:
- the seller and the buyer must be subject to VAT
- the two intra-community VAT numbers must be valid and appear on the invoice
- delivery must be made against payment and you must provide proof of transport outside Belgian territory
- You then proceed to a self-liquidation of the amount in your Belgian VAT return
As a reminder: movements of goods within the European Community are subject to a declaration obligation both for their entry and for their exit from the territory (Intrastats).
The self-assessment of intra-community VAT:
This involves including in your declaration the theoretical amount that should have been paid to the Belgian State by your company during this operation. Then, this amount is deducted (fictitious reimbursement by the Belgian State) so that the operation is null.
Warning: always check the authenticity of the VAT number transmitted
During an intra-community transaction, it is essential to verify the authenticity of the intra-community VAT number transmitted by your business partner. Indeed, if this number is false, your transaction will be treated as an individual transaction. You will then have to pay VAT. You can do this free of charge using the automated VAT information system (VIES) set up by the European Commission. Your company sells a product to an individual residing. If your company is subject to VAT, the distance sales regime applies (detailed in the paragraph “online sales”).