Belgian VAT changes – Pharma sector


1. Fees paid to ethical committees: same VAT treatment as clinical trials

Research work (including but not limited to clinical trials) performed by Belgian doctors and / or hospitals for consideration for Belgian pharmaceutical companies is, as a general rule, subject to Belgian VAT unless the doctor/hospital can apply the VAT exemption for “small businesses”.

Based on the Decision n° E.T. 116.111, of 21 February 2011, Belgian doctors/hospitals can however opt to apply a special regime as regards research work performed for consideration for Belgian pharmaceutical companies whereby the Belgian VAT due is to be settled by the pharmaceutical company (application of the reverse charge mechanism) on the basis of a self-bill (issued by the pharmaceutical company).

In a newly published Decision ( E.T. 116.111/2 of 27 June 2013) the Belgian VAT authorities confirmed that the fees paid by pharmaceutical companies as regards advice’s rendered by ethical committees in the framework of clinical trails may also benefit from the optional scheme as foreseen in the Decision n° E.T. 116.111, of 21 February 2011.

2. New VAT threshold for small businesses

Further to the authorisation of the EU Council, it has been announced that the threshold for the VAT exemption for “small businesses” will be increased from 5.580 EUR to 25.000 EUR with effect as from 1 January 2014.

What does it mean for you?

This increase is not directly applicable to your company. However, this is a good news for the Belgian doctors rendering services to pharmaceutical companies established in Belgium (consulting, advisory board, studies, etc.). Indeed, this new threshold will allow a lot of doctors to opt for the small businesses VAT regime, which means very limited VAT compliance obligations. Therefore, it would be worth bringing this new threshold to the attention of the doctors in contact with your company.

If you have any questions in this respect, please contact your regular PwC VAT adviser or one of us.