“Tolling manufacturer = VAT FE of principal?” Belgian Court of Appeal refers to ECJ!

On 18 March 2022, the Belgian Court of Appeal of Liège referred preliminary questions to the European Court of Justice (“ECJ”) in a case where the Belgian tax authorities claim the existence of a Belgian VAT fixed establishment (“VAT FE”) for a Swiss principal, through its affiliated Belgian toll manufacturer. Will the ECJ finally stop the authorities’ hunt?

The Belgian tax authorities accordingly argue that Belgian VAT should have been charged on the fees for tolling services by the Belgian toll manufacturer towards the Swiss principal. Indeed, the Belgian tax authorities argue that the place of supply of the services would be Belgium (instead of Switzerland), following their argument that the Swiss principal has a Belgian VAT FE (by means of the Belgian toll manufacturer) and that this Belgian VAT FE is the actual beneficiary of the services (rather than the Swiss HQ). 

Wouldn’t it be contradictory to consider the toll manufacturer as a VAT FE of a Swiss principal, but at the same time assess VAT on the services between that “VAT FE” to its “HQ”? Or actually to the same “VAT FE”, because the authorities also qualify the latter as the actual recipient (rather than the Swiss “HQ”)?

While looking forward to the input of the ECJ in the above case, on 7 April 2022 the ECJ will release its decision in the long-awaited Berlin Chemie case (C-333/20). Hopefully this decision might already provide additional guidance for other pending VAT FE cases.

Questionnaire

We have compiled a practical questionnaire, enabling a first indication on the potential presence & risk level of having a VAT FE. Feel free to reach out in case you would like to obtain access to this questionnaire.

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