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Belgium drops import VAT guarantee requirement

  • Sep 15, 2012 | Richard Asquith

Belgium drops import VAT guarantee requirement

From 1st October 2012, companies importing goods into the European Union via Belgium will no longer have to provide bank guarantees as part of the VAT deferment scheme.  This change will help promote Belgium as an entry point for distributors around Europe, and relieve the Belgian VAT compliance burden.

When goods are imported into the EU for the first time, import VAT becomes due.  This is set at the level of the country of import’s standard VAT rate.  The average EU VAT rate is now a little over 21%.  Belgium, along with other countries such as the Netherlands and Czech Republic have for many years been providing special VAT deferment schemes, enabling importers to defer the import VAT payments at least until the time of their next EU VAT return.  This enable the importer to sell on the goods, and thus charge sales VAT to reduce the import VAT.  This helps improve cash flows, and simplifies their EU VAT compliance.

However, such Belgian deferments typically required the importer to put up an expensive bank guarantee, often through a bank in the country of import.  This has now been dropped from 1 October 2012.  In addition, importers will also have the option of using a local Belgian VAT representative as the importer of record.  This will eliminate the VAT compliance burden of having to register themselves for Belgian VAT.

Importers who already have a Belgian import guarantee in place may apply to have their guarantee refunded after 1 January 2013.

VP Global Indirect Tax
Richard Asquith
VP Global Indirect Tax Richard Asquith
Richard Asquith is the former VP Global Indirect Tax at Avalara