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When a building contractor is operating a construction site in Belgium, he calls on [Belgian or foreign] subcontractors on a frequent basis to undertake part or entirety of the work: rental of construction machinery [cranes, bulldozers, mechanical diggers, conveyors of exceptionally heavy loads, etc.] with or without the provision of staff, scaffolding rental, cleaning services, site supervision, measurement of the site, etc.

Within this framework, one should be watchful to the localization of these subcontractors’ supplies of services in regards to VAT. Only the supplies of services related to an immovable property must be taxed in Belgium. Other services will have to be taxed at the place where the foreign building contractor is established [“B2B” general rule – place of the recipient].

VAT Committee

The borderline between these two rules is sometimes difficult to draw. The VAT Committee has just provided a guideline on the issue and argues almost unanimously that the provision of an equipment, with or without accompanying staff, in order to enable the recipient to perform a work related to an immovable property, is defined as a rental of movable goods, given that the subcontractor is responsible for providing the equipment and not for carrying out the work. However, if the equipment and a sufficient number of staff members are supplied to the client and the subcontractor is supposed to assume the responsibility for carrying out a work, then the subcontractor is considered as performing a construction work. This presumption may be refuted by any mean of fact or any mean of law so as to determine the real nature of the service.

Therefore, the supply of a crane and staff in order to excavate a land will be viewed as a supply of services related to an immovable property taxed in Belgium [place of property] if the recipient is responsible for carrying out the work. Failing that, it will be considered as a supply related to movable goods located in the country where the recipient is established.

The VAT Committee also observes almost unanimously that the following services are sufficiently related to an immovable property [and must therefore be taxed at the place where property is located]:

  • Supervision and safety services on the construction site ;
  • Plans drawing of a building aimed at being erected on a specific plot of land, irrespective of the fact that construction works will effectively be carried out or not ;
  • Building permanent structures on a land as well as construction or demolition works performed on permanent structures, such as gas, water and sewer pipeline systems and so on ;
  • Installing or assembling machines or equipments which are referred to as immovable property once installed or assembled, as well as maintenance, repairing, inspection and supervision of these machines.

The place of taxation of different services rendered by subcontractors to a foreign building contractor within the frame of a worksite in Belgium can be highly debated with the Belgian Tax Authorities. The Belgian VAT wrongly invoiced by the subcontractor is not deductible by the building contractor and can besides lead to penalties and late payment interests.

Therefore, it is required to analyze carefully each operation in order to guarantee a correct VAT treatment. Guidelines provided by the VAT Committee may be very useful in case of litigation.


Document taxud.c.1(2011)319672 – Work document n° 688