RECLAIMING IMPORT VAT IN BELGIUM
Goods imported into Belgium from abroad must be cleared for customs when they reach the Belgium’s borders (i.e. International Airports or Sea Ports). The customs declaration is usually handled by an appointed carrier, freight forwarder or customs broker and gives rise to the payment of import duty and taxes.
Let us remind that a customs duty is applicable only when the value of the consignment is greater than €150 while import VAT is charged on commercial consignments of any value. The import VAT exemption that used to be applicable on small consignments valued at €22 or less has been removed since July 1st, 2021. Nevertheless, parcels with a value not exceeding €150 that are shipped to Belgian consumers from a non-EU country can still benefit from an import VAT exemption when the foreign online retailer has opted for the IOSS registration through an Intermediary.
When a DDP terms (Delivered Duty Paid) is used for the shipment of a consignment to Belgium, the carrier will generally advance the payment of import duty and VAT to the Belgian customs and will send the corresponding invoice to the shipper. The latter can reclaim import VAT incurred in Belgium if certain conditions are fulfilled.
Before you read further, please note that the first key condition to reclaim import VAT in Belgium is to hold a customs clearance document also called Single Administrative Document (SAD) displaying the name of your foreign company as the Importer of Record (IOR) at destination. Using the name of another company as the Importer of Record (also known on the market as “IOR services”) may lead to a permanent loss of your right to reclaim import VAT. You should therefore get an EU EORI number in order to be able to act as the Importer of Record. Secondly, your foreign company should be the owner of the goods imported into Belgium for business purposes.
A. What is a DDP shipment to Belgium ?
DDP or Delivered Duty Paid refers to shipments where the shipper (the overseas company not established in Belgium) delivers goods sourced from a non-EU country to their final destination in Belgium, but already cleared for importation.
The overseas company bears all landed costs, including transportation charges, import duty and taxes levied on the goods by the Belgian Customs Authorities.
B. How import duty and taxes are charged in Belgium ?
When sending a Delivered Duty Paid (DDP) shipment to Belgium, an overseas company handles the shipment to a forwarding agent like FedEx, DHL or UPS, to name but a few. The latter arranges customs clearance in Belgium in the name and on behalf of the shipper.
The freight forwarder or carrier pays in advance the duty and taxes to the Belgian Customs and returns to the shipper an invoice corresponding to import taxes prepaid.
C. Can my company reclaim import VAT on a DDP shipment to Belgium ?
YES! But clearly note that your company should be the owner of the goods imported into Belgium for business use. Your foreign company should also act as the Importer of Record (IOR) in Belgium by using its own EU EORI number for customs clearance purposes. The EORI number has to be displayed on the shipping documents.
D. Which countries have a VAT refund reciprocity agreement with Belgium ?
A VAT refund reciprocity agreement is not required at the moment. Any overseas company, without any restriction related to the country of incorporation, is eligible to recover import VAT in Belgium.
E. What are the requirements for import VAT refund in Belgium ?
All the following conditions have to be fulfilled:
- The overseas company (the shipper) should be the Importer of Record (IOR) or the “Consignee” on the Customs document issued in Belgium. To read more on the IOR requirements, please go on the page: Prepare your shipment.
- The overseas business (the shipper) applying for import VAT refund in Belgium is a taxable person in the country of incorporation. A Tax certificate proving this status will be required.
- The customer in Belgium is a taxable business registered for VAT (e.g. retailers, distributors, industrial companies, etc.). If your clients are private individuals, you can appoint an IOSS intermediary for import VAT relief on low value consignments.
- The amount of VAT for which a refund claim will be introduced represents at least 200 EUR for non-EU companies and 400 EUR for EU based companies.
- The VAT refund claim is submitted to the Belgian Tax Authorities no later than September 30th of the year following the year of importation (both for EU based companies and non-EU companies).
F. Can I reclaim import VAT in Belgium if the goods are not immediately sold ?
Even if your company is not selling goods imported into Belgium (i.e. there is no transfer of ownership immediately after the customs clearance), you can still recover import VAT if some legal conditions are fulfilled.
Below are few examples of import flows for which you can be eligible to reclaim Belgian VAT :
1- You’re shipping goods into the warehouses of an Online Marketplace facilitating your B2C sales in the EU;
2- You’re shipping networking equipment into a data centre in Belgium (colocation service);
3- You’re shipping goods for storage in Belgium under a consignment sale agreement;
4- You’re shipping a machine or an equipment to be incorporated into a plant built in Belgium;
5- You’re shipping an equipment into Belgium for rental or leasing purposes;
6- You’re shipping an engine or a machine into Belgium for maintenance under a warranty agreement.
G. How long does it take before I can receive a VAT refund in Belgium ?
In Belgium, the tax authorities examine each claim and make a decision within 3 to 6 months after having received the VAT refund application and all the relevant documents. We remind you that this is an average timescale provided for your information only. The Belgian Tax Authorities can decide to run a thorough investigation on a specific claim and will send to the applicant or to its agent a letter of inquiry.
H. Further help or advice ?
If you have an inquiry about the possibility of reclaiming import VAT paid in Belgium, feel free to send us a message (our email address is displayed on the right side of the contact form) or call us by dialing +33-261-536-544.
The content published here above is based on information timely as of 28th October 2021, unless otherwise indicated. Amendments to the tax laws in various EU countries covered here could have been passed recently. Therefore, readers should contact Corintax Consulting for further insights.