Belgian Court of Appeal: substance is also key for VAT


In the case at hand, the Belgian Court of Appeal ruled that a Luxembourg transportation company had an establishment in Belgium for VAT purposes as the company was mostly operating from Belgium and had limited substance in Luxembourg. Consequently, the Luxembourg company had to apply Belgian VAT on its operations. This judgment is in line with the VAT Directive and the position of the EUCJ on the notion of VAT PE.

It is likely that similar disputes with the Belgian VAT authorities will occur more frequently considering the increased focus on PE and substance, also from direct tax perspective.

If you have any further questions on the impact for your situation, please do not hesitate to contact your regular PwC adviser.