Belgium warns UK businesses to appoint Brexit Fiscal Representative

The Belgian tax authorities are contacting all UK businesses with a Belgian VAT registration and informing them that they must appoint a local Fiscal Representative as a result of the UK leaving the EU on 29 March 2019.

EU businesses selling good cross-border in the EU may direct register with other member states for VAT reporting. However, 19 of the existing 28 EU states oblige non-EU companies with non-resident VAT registrations to appoint a Fiscal Representative. These are special resident tax agents which are responsible for the correct VAT filings, bookkeeping, VAT payments and correspondence with the local tax authorities. They are held jointly and severally liable for any unpaid VAT of their foreign clients. As a result, they have high fees and typically insist on a bank guarantee to cover their potential losses.

Since the UK will become a third country after Brexit, its businesses will be required to appoint Fiscal Representatives in the relevant countries.

Apply by 29 March to gain 6-month grace period

The Belgian authorities are now warning UK businesses that such Fiscal Representative application process must be underway by 29 March 2019 in the case of a non-transition deal Brexit or delay to other exit process. They are giving a six-month grace period until 30 August for this to be processed and completed. They warn that the application and approval process of a switch from a direct registration to a Fiscal Representative can take over one month. For Belgium, there is no requirement to change VAT number.