Belgian VAT on foreign employer's company car for Belgian residents? And vice versa?

Belgian VAT due by a foreign employer providing a company car to an employee residing in Belgium?
And foreign VAT due by a Belgian employer for an employee residing outside Belgium?

Following the 'QM' judgment of the European Court of Justice (C-288/10), the Belgian VAT authorities have confirmed that foreign employers may have to pay Belgian VAT for providing a company car to employees residing/staying in Belgium. This is the case when the car is made available to employees based in Belgium for a period longer than 30 days and 'for consideration' (e.g. via partial withholding of salary, thus not “free of charge”).

For the employer, in principle, this results in a Belgian VAT registration obligation, or an OSS registration obligation, in order to pay the Belgian VAT to the State. Failure to comply with these obligations can upon an audit result in an assessment of Belgian VAT, increased with a proportional penalty of up to 20% and late payment interest of 8% per year calculated on the VAT amount, as well as non-proportional penalties for failure to comply or late compliance with the registration & reporting obligations.

In light of the above, it is recommended to carry out spontaneous regularizations as soon as possible, in order to at least avoid the proportional penalties.

Given that the Belgian position is based on a judgment of the European Court of Justice, Belgian companies with employees residing abroad will in principle also be obliged to carry out similar regularizations for their foreign VAT obligations.

Some questions that may arise in this regard:

• In which situations does the provision of a company car qualify as ‘for consideration’?

• On which amount exactly is then VAT due? How should this be calculated correctly?

• Should my company register locally in Belgium and/or abroad for VAT purposes? Are there any alternatives possible?

• Is it advisable for my company to carry out regularizations in order to avoid penalties in Belgium? If so, how and from when?