The draft VAT bill updates rules on the place of supply for specific services, the profit margin scheme for art and antiques, and VAT rates, partly implementing EU Directive 2022/542.

The Belgian government has introduced a draft VAT bill to the Chamber of Representatives on 9 October 2025, aiming to update rules on the place of supply for certain services such as cultural, artistic, sporting, scientific, educational, and entertainment, and the profit margin scheme for art and antiques, and the applicable VAT rates.

This bill partially implements Directive (EU) 2022/542 on VAT rates. It will take effect upon its publication in the Official Gazette.

The key changes are summarised below:

1. Changes to VAT rates for art and collectibles

The draft law modifies the VAT Code concerning the taxation of art objects, collection items, and antiquities.

Generalising the Reduced Rate: The Belgian government has opted to generalise the application of the reduced VAT rate (6%) for the supply, intra-Community acquisition, and importation of these specific goods. This move is made possible by the greater flexibility afforded to Member States under the new EU rules (specifically, point 26 of Annex III of Directive 2006/112/CE).

Historically, Belgium already applied a reduced rate (6%) to these items, but within a much stricter framework, for instance, limiting the rate only to imports or to deliveries made by the artist or their successors. The new law replaces these conditions to ensure the 6% rate applies broadly to all supplies of these specified goods.

2. Restrictions on the Margin Scheme

In direct relation to the generalised reduced VAT rate, the draft introduces a key restriction to the application of the profit margin scheme (régime de la marge bénéficiaire).

The margin scheme is a special regime that allows taxable dealers (assujettis-revendeurs) to apply VAT only to the profit margin realised on the sale of goods, rather than the full sale price.

Under the revised rules, taxable dealers can no longer opt to use the margin scheme for art objects, collectibles, or antiquities if those goods were originally acquired or imported with the application of a reduced VAT rate.

This limitation is motivated by concerns regarding competitive distortion. If the margin scheme were allowed alongside a reduced purchase VAT rate, dealers in Member States applying the reduced rate could gain an unfair advantage in cross-border sales. By forcing dealers who purchased goods at the reduced 6% rate back into the normal VAT regime, the tax is applied at the rate of the destination Member State upon resale, thus eliminating the distortion.

The only statutory restriction on applying the reduced rate is that it cannot be applied to deliveries that fall under the margin scheme.

3. Localisation rules for virtual services (Streaming)

The draft law also includes mandatory changes to the place-of-supply rules for certain services related to cultural, artistic, sports, scientific, educational, entertainment, or similar events. This aims to address the growing reality, accelerated by the COVID-19 pandemic, that many events are now attended virtually (via streaming or digital availability) rather than requiring physical presence.

The core issue was that the traditional rule taxed the service where the physical event took place, but for virtual attendance, this “proxy” for the place of consumption became irrelevant, creating a risk of “rate optimisation” where service providers might choose establishment in the country with the lowest VAT rate.

The key distinction now depends on whether the recipient is a taxable person (assujetti) or a non-taxable person (non-assujetti).

  • For Taxable Persons: Services consisting of providing access to these manifestations are normally taxed where the event physically takes place. However, this specific rule is now disregarded if the customer’s presence is virtual. Instead, the service is taxed according to the general rule: at the location where the customer (the taxable person) has established their economic activity, stable establishment, domicile, or habitual residence.
  • For Non-Taxable Persons: Services related to these events are normally taxed where the event physically takes place. If these services, or related ancillary services, concern events or activities that are streamed or otherwise made available virtually, the place of supply moves to the location where the non-taxable person is established, domiciled, or has their habitual residence.

The draft law also expands the King’s authority (via Royal Decree) to implement measures to prevent double taxation, non-taxation, or distortions of competition (known as “use and enjoyment” rules), specifically extending this power to services whose place of supply is determined by the new virtual service localisation rules for non-taxable persons.

The implementation of this law is scheduled to take effect on the day of its publication in the Belgian Official Gazette.