Easing ‘co-contracting’ scheme: responsibility application reverse charge transferred to service recipient

Extension of Article 20 Royal Decree nr. 1

From 1 January 2023, the reverse charge on construction work must be applied to any taxpayer submitting periodic VAT returns in Belgium. This also applies to taxpayers based outside Belgium who submit periodic VAT returns.

Previously, Article 20 Royal Decree nr. 1 of the Belgian VAT Code could only be applied if the established purchaser of the construction work, who was not based in Belgium, was registered through a liable representative in Belgium. From 1 January 2023, this will also be possible if the non-resident taxpayer has undertaken direct registration.

However, this amendment only applies if the construction work is undertaken by a Belgian contractor. The situation where the construction work is undertaken by a foreign contractor remains unchanged for the time being.

Amendment invoice declaration

The legislator has also linked this to a new, special invoice declaration. The following declaration must be made on invoices from 1 January 2023:

‘Reverse charge. In the absence of an objection in writing within one month of receipt of the invoice, the customer is deemed to acknowledge that he is a taxpayer required to submit periodic returns. If that condition is not fulfilled, the customer is in respect of that condition liable for the payment of the tax, interest and fines due.’

If the customer is not required to submit periodic VAT returns, the customer must inform the service provider. In other words, this means that the responsibility for applying the co-contracting party scheme is transferred to the purchaser of the construction work. Is this scheme being misused? Then the customer will be liable for the tax, interest and any fines arising as a consequence.

If you have any questions about the new invoice declaration or about the amendment to Article 20 Royal Decree Nr. 1 of the Belgian VAT Code, you can get in touch with one of our experts using the contact form below.