Belgium: Use and enjoyment rule for freight transport
Tuesday May 11, 2010
From 4 April 2010 a new use and enjoyment rule applies in Belgium for B2B freight transport and ancillary services. The effect of the new rule is that where the use and enjoyment of a service takes place outside of the EU but the supply is made to a Belgian taxable person, the place of supply is shifted to outside the EU. As a result, the supply is no longer liable to Belgian VAT.
The new rule also deals with transport which take place partly inside and partly outside of the EU, for example freight transport from France to Italy but where the journey goes through Switzerland. In such cases, it is only the transport that takes place in Switzerland that is affected by the use and enjoyment rule and the transport in France and Italy follows the normal place of supply rules. The distances covered by each respective part of the journey are used to determine the amount of the supply that is subject to the use and enjoyment rule.
It should be noted that the use and enjoyment rule does not apply to transport and ancillary services which are used and enjoyed in Belgium but have a place of supply outside of Belgium, for example because the customer is established outside of the EU. However, it is possible that the Belgian Tax Authorities may introduce further use and enjoyment rules in the future.