No more VAT exemption for subcontracted transport services relating to export of goods

Rules until 31 March 2022

The VAT exemption for transport related to an export of goods applies both to services provided to the exporter of the goods by a transport company and to any preceding services provided by subcontractors. Other services in connection with the transport are also exempt from VAT.

Accordingly, until 31 March 2022 the VAT exemption applies to both the services provided to the consignor by the main haulier and those provided to the main haulier by the subcontractor(s).

Rules from 1 April 2022

As a result of a judgement by the Court of Justice of the European Union, these rules are now changing. The judgement held that transport services in connection with an export of goods are only applicable for exemption if provided directly by the main haulier to the consignor.

Services provided to the main haulier by a subcontractor remain exempt from VAT as well, as long as these have a direct connection to transport, such as loading, unloading, weighing, measuring and handling of goods, and are clearly noted on the invoice. Services relating to the import of goods also remain unaffected.

Practical effects

We will provide a brief example in explanation. Company A, subject to Belgian tax, sells goods to a customer B in China. Belgian company A engages transport company T to deliver the goods. Haulier T subsequently hires haulier O for the actual transport. Transport companies T and O are both established and taxable in Belgium. The effects in practice:

• Transport services provided by main haulier T to consignor A remain exempt from VAT.
• Transport services provided by subcontractor O to main haulier T are subject to 21% VAT.
• Services related to the loading, unloading and weighing of goods provided by subcontractor O to main haulier T are exempt from VAT, as long as these are listed separately on the invoice.

Do you require further information about the restrictions on this VAT exemption? Please don’t hesitate to contact one of our experts at tax@vdl.be.