Belgium has taken steps to respond to the outcome of the Skandia America Corp court case (C-7/13 of 17 September 2014).
Indeed, the Belgian cabinet council has recently approved a draft proposal of law of the Belgian Minister of Finance (Johan Van Overtveldt), whereby all international transactions between a head office and a branch are subject to VAT in case one of them is part of a VAT group. It is in that respect no longer of importance whether the costs concerned are re-charged to another member of the VAT group or not.
The draft law is clearly in line with an administrative decision that the Belgian VAT authorities have recently published in this respect (link to previous flash) and will provide a legal framework for the position of the Belgian VAT authorities.
It is estimated that this measure of the Belgian government will yield an additional yearly revenue of approximately EUR 12.7 million. The draft proposal of law has been referred to the Council of State for a further opinion.
For more information, please contact your local PwC adviser.