Buying and selling abroad: what’s the deal with VAT?

You're likely already quite familiar with VAT and what it means for you as a self-employed individual in Belgium. But what about VAT when you're selling abroad? The rules can vary depending on whether you're dealing with goods or services, whether your customer has a VAT number or not, and whether they're located inside or outside the EU. There are also rules to consider when you're making purchases from abroad. We'll tell you all about it in this article.

Make it easy for yourself, jump to the section you want to learn more about. 👇

1. Selling to businesses within the EU
2. Selling to consumers within the EU
3. Purchasing within the EU
4. Selling to businesses and consumers outside the EU
5. Purchasing outside the EU

VAT Rules in the European Union

Selling to businesses in the EU

Do you need to charge VAT when selling to foreign businesses? If your customer is a business established in the EU, then generally, you do not need to. In this case, the VAT reverse charge is applied, because it concerns an intra-community transaction of a good or service.

Did you purchase products or services directly related to your sale? Then you may (partially) reclaim that VAT.

⚠️ Caution: Always check through the VIES database (European tool for verifying VAT numbers) whether your foreign customer has a valid VAT number. If your customer does not have a valid VAT number and is therefore not subject to VAT? Then follow the rules for 'Selling to Consumers in the EU' (see below).

Selling to consumers in the EU

In 2021, some changes were made to the VAT rules for those selling to consumers in the EU. The changes are particularly important for those engaged in distance selling (e.g., via a webshop like Shopify) and/or providing digital services. New is the One Stop Shop (OSS) or single-window system, making it easier to declare foreign VAT.

In a nutshell:

• For services to consumers in the EU, you charge the VAT rate from their country, unless it concerns digital services or distance selling.
• Is your annual turnover from digital services or distance sales within the EU less than €10,000? Then you may charge Belgian VAT rates.
• Does your annual turnover from selling digital services or distance sales within the EU exceed €10,000? Then you charge the VAT from the customer's country.
• If you prefer not to consider the €10,000 threshold, then always charge the VAT rate from your customer's country. Learn more about selling to consumers from the EU.

OSS System: easier to declare foreign VAT

The One Stop Shop system (OSS) simplifies declaring European VAT but is non-obligatory. Through the system, you declare all the VAT you owe in other EU countries and make a single payment. Your declaration and payment are then automatically forwarded to the tax authorities of the concerned countries.

Purchasing in the EU

Generally, you pay 0% VAT on goods or services you purchase in another EU country: the VAT reverse charge applies. This means you must still process and pay the VAT in your VAT return later.

💡Accountable tip: Easily scan or upload your purchase invoices for goods or services from another EU country into Accountable, and we ensure a flawless VAT return.

There are exceptions where you pay the VAT from the seller's country.

Read more about business purchases in the EU.

VAT Rules outside the European Union

Selling to consumers and businesses outside the EU

If you sell services or goods to customers outside the EU, you do not need to charge VAT. It does not matter whether your customer is a consumer or a business.

You must be able to prove to the tax authorities that your goods have left the EU. Otherwise, you must still pay Belgian VAT.

Purchasing outside the EU

If you import goods from a non-EU country, you generally pay the VAT applicable in the country where those goods enter the EU. You pay that to the tax authorities of that country and also declare it there.

For services you receive from a non-EU country, the reverse-charge mechanism usually applies: you pay the VAT applicable in Belgium.

Feeling lost?

Accountable is here for you. Our software automates your accounting, ensures your invoices comply with VAT regulations, and correctly records them in your VAT return. If you have questions, our Tax Coaches are ready to assist.

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Author - Valesca Wilms

As content marketing lead at Accountable Belgium, Valesca writes about freelancing, self-employment, and taxes based on her own experience as a freelancer.

Who is Valesca ?