Belgian VAT update

1. Place of supply rules for cultural are modernised to address digital consumption and ensure correct taxation across jurisdictions.
2. The profit margin scheme is narrowed to avoid overlaps with reduced-rate acquisitions.
3. The 6% reduced rate is generalised for all transactions involving works of art, collectors’ items, and antiques, but its application is mutually exclusive with the margin scheme.

Read more in our Belgian VAT guide.

1. Place of Supply of Services – events and similar activities

The draft bill significantly revises Article 21(3)(3) of the Belgian VAT Code, aligning with EU developments while addressing the treatment of digital/virtual services.

B2B Services

• Current position: The place of supply for services granting access to cultural, artistic, sporting, scientific, educational, entertainment or similar events (e.g. fairs, exhibitions), including related services, is the place where the event occurs.
• Amendment:
  • The reference to “activities” is abolished. Only access to events remains in scope.
  • Virtual events: For business recipients, the general B2B rule (Article 21(2) – customer location) applies. The place of supply is:
    • the seat of the customer’s economic activity; or
    • the fixed establishment for which the service is supplied;
    • in absence of both, the customer’s residence or habitual abode.
  • Thus, streamed/online access to conferences, seminars, or exhibitions will no longer fall under the “event location” rule in B2B scenarios, ensuring neutrality across Member States.

B2C Services

• For physical events (e.g. admission to concerts, fairs, sporting matches, exhibitions, etc.): the place of supply remains where the event is held.
• For virtual/streamed events: the supply is deemed to take place where the private customer is established, resident, or habitually resides. This avoids distortions between physical attendance and digital participation.

Use and Enjoyment Provisions

To mitigate risks of double taxation or non-taxation, the bill introduces explicit “use and enjoyment” adjustments:

• If the supply would otherwise be located in Belgium but the services are effectively consumed outside the EU → treated as outside the EU.
• Conversely, if located outside the EU but effectively used in Belgium → deemed to be in Belgium.
• These provisions extend to streamed/virtual content, confirming Belgium’s intent to capture consumption occurring within its territory.

2. Profit Margin Scheme – works of art, collectors’ items and antiques

Current framework

The profit margin scheme under Article 58 applies to resellers in respect of:

1. Imported works of art, collectors’ items and antiques;
2. Works of art acquired directly from the creator or their heirs;
3. Works of art purchased at the reduced VAT rate from taxable persons other than taxable resellers.

Proposed amendment

A new Article 58(4)(4) clarifies that the margin scheme will not apply where the acquisition itself benefits from the reduced VAT rate.

• Consequently, where a reseller acquires works at the 6% rate, onward supply will be taxed under the normal VAT rules, not the margin scheme.
• Such purchases will instead be treated as intra-Community acquisitions subject to VAT at the rate of the Member State of arrival.

This amendment restricts the scope of the margin scheme and prevents the combination of reduced input VAT and margin taxation, which could otherwise result in an unintended advantage.

3. Reduced VAT rate (6%) on art

Current law

The 6% rate applies only to:

• Importation of works of art, collectors’ items, antiques;
• Supplies by the creator or their heirs/beneficiaries;
• Occasional supplies by other taxable persons, subject to conditions (imported by them, or acquired from the creator/heirs, or giving full deduction entitlement);
• Certain intra-Community acquisitions (same conditions as above).

Proposed reform based on new reduced VAT rate freedoms introduced in 2022.

• The bill extends the reduced 6% VAT rate to all supplies, imports, and intra-Community acquisitions of works of art, collectors’ items, and antiques.
• Restriction: The 6% rate is disallowed where the profit margin scheme applies.

This creates a clear dichotomy: resellers operating under the margin scheme cannot combine it with reduced-rate acquisitions; all others benefit from the extended 6% rate.