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It often happens that a foreign company uses a Belgian provider to temporarily store their goods. This storage service may be accompanied by other services (handling, loading, unloading, transportation of goods to the final destination, etc.). The service provided can consist of a passive use (simply providing a storage space) or an active use in the field of providing storage services (“warehousing” contract – complex set of services).

The question that has arisen since January 1st 2010 – date of implementation of the “VAT package” in the domestic law of each member state – is to know whether this type of service is to be localized in the recipient’s country in accordance with general rule governing the localization of services (Article 44 of the Directive) or in Belgium (country where the warehouse is located) in accordance with the derogatory rule – place of the immovable property (Article 47 of the Directive). The answer to this question is crucial since it can lead to situations of double taxation or non-taxation when the customer is not established in the same country as the warehouse owner. It also poses a problem in terms of exchange of intra-Community data.

The Belgian VAT administration has reviewed its position on this issue once again. In response to a parliamentary question, the Minister reminded that there is no preference of the general rule on derogatory rules. A service must be localized where the property is located when it has a sufficient direct connection with this property which is undeniably the case of a warehousing service. No distinction should therefore be made between a passive use (simply providing a place of storage) and an active use (supply of a complex set of services) that remain taxable in the country where the warehouse is located.

However, in response to differences of interpretation between Member States on this issue, the Belgian VAT administration has decided to temporarily accept a localization of such services in the recipient’s country (under the general rule ) and that, until the central VAT services, after discussion with other Member States (via the VAT Committee) confirm or modify their views.


P.Q. N°486 of March 12, 2010 –  Luk Van Biesen