KINGDOM OF BELGIUM Federal Public Service Foreign Affairs, Foreign Trade and Development Cooperation Protocol Directorate P1.1 CIRCULAR NOTE TAX SYSTEM FOR THE VEHICLES OF THE DIPLOMATIC MISSIONS AND THEIR PERSONNEL MEMBERS 1 December 2012 The Federal Public Service Foreign Affairs, Foreign Trade and Development Cooperation presents its compliments to the diplomatic missions established in Belgium and has the honour of informing them of the new general tax dispositions on vehicles for the above-mentioned missions and their privileged personnel. The Federal Public Service Foreign Affairs, Foreign Trade and Development Cooperation takes this opportunity to renew the assurance of its highest consideration for the diplomatic missions established in Brussels. The following text is a translation. If there is any doubt only the Dutch or French version are authoritative. To the diplomatic missions established in Brussels Egmont Karmelietenstraat 15, B-1000 Brussels Tel. +32 2 501 81 11 E-mail: info@diplobel.fed.be www.diplomatie.be
TABLE OF CONTENTS 1 MEANS OF TRANSPORT QUALIFYING FOR TAX EXEMPTION FOR OFFICIAL AND PERSONAL USE 2 MEANS OF TRANSPORT EXCLUDED FROM TAX EXEMPTION FOR OFFICIAL AND PERSONAL USE 3 TAX SYSTEM FOR OFFICIAL VEHICLES 3.1. Persons entitled to tax exemptions and extent of entitlement; 3.2. Procedure; 3.3. End of VAT exemption system - regularisation; 3.4. End of exemption system on import duties - regularisation. 4 TAX SYSTEM FOR VEHICLES FOR PERSONAL USE 4.1. Persons entitled to tax exemption - terms and conditions; 4.2. Number of cars for which one can obtain exemption while holding office in Belgium - restrictions; 4.3. Term during which the exemption applies - regularisation; 4.4. Procedure; 4.5. End of VAT exemption system - regularisation; 4.6. End of exemption system on import duties - regularisation. 5. ADMINISTRATIVE REGULARISATION WHITOUT PAYMENT: 5.1. In cases of force majeure; 5.2. In cases of theft; 5.3. When title holder passes away. 6. GENERAL 6.1. Vehicle maintenance and repairs; 6.2. VAT on indemnification pursuant to an accident 7. USEFUL ADDRESSES 8. COMING INTO FORCE 2
1. MEANS OF TRANSPORT QUALIFYING FOR TAX EXEMPTION FOR OFFICIAL AND PERSONAL USE 1.1. Passenger vehicles and dual-use cars (estate cars); 1.2. Minibuses (vehicles having a maximum of eight passenger seats in addition to the driver s seat); 1.3. Pick-up vehicles in the form of delivery vans (permissible maximum mass of less than 3,500 kg, including maximum loading capacity); with a driver s compartment consisting of a solid and separate construction providing seating for the driver and passenger(s), and fully separated load-bed that is reserved for luggage and goods; with an open and fixed load-bed having a flat surface, without anchorage, points of attachment or fastening for seats, benches or safety belts. The load-bed may be equipped with a tailgate that can be lowered and a removable cover in plastic or PVC or, alternatively, a tarpaulin covering a metal frame. (In some cases pictures of the models are provided); 1.4. motorcycles. 2. MEANS OF TRANSPORT EXCLUDED FROM TAX EXEMPTION FOR OFFICIAL AND PERSONAL USE All other means of transport not listed in point 1, for example: 2.1. trucks, delivery vans, coaches (vehicles having more than 8 seats in addition to the driver's seat), caravans, camper vans, motor homes, campers, trailers, or similar vehicles having other names; 2.2. boats and ships, regardless of the type; 2.3. helicopters and airplanes or aircraft, regardless of the type; 2.4. all types of land vehicles equipped with an engine but which, for whatever reason, are not registered with the Vehicle Registration Service; 2.5. the following are also excluded: goods or services, accessories or components of or that are intended for the means of transport listed here in point 2 or for means of transport for which no ATV (*) vignette has been issued. 3
3. TAX SYSTEM FOR OFFICIAL VEHICLES 3.1. Persons entitled to tax exemptions and extent of entitlement The diplomatic missions accredited by the Protocol Directorate (referred to hereafter as title holder) are exempt from import duty and/or from VAT on the import, or from VAT for the purchase in Belgium or in another EU Member State, and for the lease or rent of such vehicles that are intended for their official use (i.e. to be registered in the name of a diplomatic mission). Such exemption can be restrictive in a number of cases, such as: - where reciprocity requirements are not met (if this is the case, the Protocol Directorate will always send a diplomatic memorandum to the respective diplomatic mission with the notification that there is a derogation from the general rules outlined in this circular note); - the number of exempt vehicles for official use exceeds the number of diplomats in office; - the diplomatic mission concerned has proven debts; - the diplomatic mission concerned systematically does not respect the traffic rules; - it appears that the car fleet of the diplomatic mission is not or not adequately insured; - infringements of the tax legislation; - etc. 3.2. Procedure The terms, such as document, certificate, invoice, etc. used here are outlined in detail in decision ET 111417, which is enclosed with circular note of 2 April 2012. The following, together with the invoice, must be submitted to the Central Services of the General Administration for Customs and Excise to be able to benefit from exemption: - application, in duplicate, for exemption from VAT for purchases in Belgium, which is document 450 (official use); - or VAT and/or excise duty exemption Certificate (Certificate 151), in duplicate, for purchases in another EU Member State; - or a 136 F-return to import goods from a country which is not an EU-Member State. a. The purchase or import of vehicles needed for the direct exercise of the real functions of the diplomatic missions is regarded as intended for official use; b. As regards a leased vehicle, the lease contract must be drawn up in the name of the diplomatic mission to be able to enjoy exemption for it. In addition, the minimum amount of the rental at the expiry of the term to which the, statements of account or payment refers, must be EUR 123.95, excluding tax. In this case the VAT exemption on the rental is covered by documents 450 or Certificate 151. These documents are accompanied by a copy of the rent agreement or the lease in the name of the diplomatic mission. Said documents are valid for a term not exceeding 12 consecutive months. A new document must be submitted after the expiry of such term. When the rented or leased vehicle is purchased at a later point in time, the above-mentioned working method is repeated, seeing that this regards property 4
transfer. The regularisation term intended in point 3.3 only takes effect as of the new owner registration date; c. It is mandatory that these vehicles are registered in the name of the diplomatic mission in Belgium within 30 days after the ATV (*) vignette has been issued. 3.3. End of VAT exemption system - regularisation; The exemption granted for the vehicle is final after a term of 3 years, which is to be calculated as of the first time that the vehicle was registered in Belgium in the name of the official title holder or a former (official) title holder, unless there is a reciprocitybased provision to the contrary. If the vehicle (purchased or imported with VAT exemption) is transferred to a person who is not entitled to exemption before the end of a term of three years, to be calculated as of the date on which the vehicle was first registered in Belgium in the name of the official title holder or a former (official) title holder, the exemption granted is reviewed and VAT must be regularised. This regularisation of the exempt VAT, in the name by the diplomatic mission, will be calculated pro rata temporis as based on the taxable amount at the time at which the vehicle is purchased multiplied by the remaining number of full months (x) in the time span of three years (x 36ths), to be calculated as of the date on which the vehicle was first registered in Belgium in the name of the official title holder or a former (official) title holder. A month commenced is regarded as a full month. If the vehicle to be regularised was purchased by another (official) title holder, this must be calculated as of the date on which the vehicle was first registered in the name of this first title holder in Belgium. Donating a vehicle and renting, in brief, allocating a destination to a vehicle that is not in accordance with the official use of the mission, gives rise to regularisation (in addition to the possibilities outlined in point 5). There is regularisation without payment (VAT is therefore not chargeable) when the diplomatic mission definitively exports the vehicle or sells it to an (official) title holder if such title holder is also entitled to the vehicle exemption system for this vehicle. 3.4. End of exemption system on import duties - regularisation. When the temporary system of the import duties ends because the vehicle is definitively imported into Belgium, the duties upon import must always be regularised by paying the chargeable import duties by the diplomatic mission as soon as the vehicle is definitively imported. The following cases constitute definitive import: when a vehicle imported with a temporary exemption is sold, donated, rented or lent; when the vehicle in question is given a destination not in keeping with official use. The definitive import therefore takes effect at the point in time at which the vehicle is transferred or the diplomatic mission accords it a destination that is inconsistent with official use. The duties for vehicles remaining in Belgium or in another EU 5
Member State must be regularised in the name of the diplomatic mission as based on the value of the vehicle at the point in time at which it is transferred or at the point in time at which the incident leading to the regularisation occurred. This applies, regardless of how old the vehicle is. There will be no regularisation (no duties are therefore owed upon import) when (in addition to the possibilities outlined in point 6) the diplomatic mission definitively exports the vehicle, sells it to another diplomatic mission or to a person who is also entitled to benefit from the temporary exemption system for vehicles. 4. TAX SYSTEM FOR VEHICLES FOR PERSONAL USE 4.1. Persons entitled to personal tax exemption - terms and conditions The beneficiaries of the tax exemption, referred to as title holders, are persons holding a position in a diplomatic mission, registered as such with the Protocol Directorate and entitled to tax privileges in such capacity when purchasing the abovementioned vehicles intended for their personal use in Belgium. Only the diplomats and members of the administrative and technical personnel of the diplomatic missions in Belgium qualify. Family members are thus not entitled to this! As regards personal use, purchasing vehicles (supply or import) with exemption is therefore strictly limited to normal use (mainly in Belgium) for the personal needs of the title holder of the exemption and to the number stated below. For the purposes of continuing to apply the exemption, every vehicle must be registered with the Vehicle Registration Service in the name of the title holder of the exemption within 30 days, to be calculated as of the date on which the ATV (*) vignette was issued. 4.2. Number of cars for which one can obtain exemption while holding office in Belgium - Limitations - A diplomat is entitled in principle at the same time to two (2) exempted vehicles; - A member of the administrative and technical personnel is in principle entitled to one (1) exempted vehicle. A vehicle, purchased or imported in exemption on the basis of the privileges in Belgium, is considered to be an exempted vehicle when it is registered for less than 3 years (36 months) in Belgium in the name of the first title holder since the date of the first registration in Belgium in the name of this first title holder. These numbers or terms can be adjusted in the following circumstances: - not meeting the reciprocity requirements (if this is the case, the Protocol Directorate will always send a diplomatic memorandum to the respective diplomatic mission with the notification that there is a derogation from the general rules outlined in this circular note); - the title holder has proven debts; - the title holder concerned systematically does not respect the traffic rules; - the title holder has not or not adequately insured his or her vehicle(s); - infringements of the tax legislation. - etc. 6
Replacing a means of transport that was purchased or imported with exemption is only allowed after a term of three years has expired, which term is to be calculated as of the first time that this vehicle was registered in the name of the title holder in Belgium, regardless of whether regularisation for this means of transport was effected with or without payment, except in exceptional circumstances and by means of a reasoned and accepted application submitted to the Protocol Directorate - P1.1, which will send these applications to FPS Finance for decision. 4.3. Term during which the exemption applies - regularisation Exemption can be invoked as of a maximum of 20 working days before the official start of the employment until the date of the termination of the position in Belgium. No exception whatsoever is allowed to this! The date to be taken into account to calculate the 20 working days is the date on which the vehicle is delivered to the owner, as this is stated on the invoice or, if this is not stated, the actual invoice date. If the title holder is relocated to another diplomatic or consular mission in Belgium, then the above-mentioned numbers remain applicable, regardless of such relocation. This relocation does therefore not lead to a new quota. A title holder who returns to Belgium for a new position at the same mission or another mission or post for his or her country in Belgium, only re-acquires the right to exemption to purchase or import a vehicle after the expiry of a term of three years after his or her vehicle(s) purchased during the earlier official term in Belgium was (were) first registered in his or her name in Belgium. After this term of 3 years has expired for one of the exempted vehicles the title holder can submit an application for a new ATV vignette if the position entitles him or her to it. 4.4. Procedure The terms, such as document, certificate, invoice, etc. used here are outlined in detail in decision ET 111417, which is enclosed with circular note of 2 April 2012. The following, together with the purchase invoice, must be submitted to the Central Services of the General Administration for Customs and Excise to be able to benefit from exemption: - application, in duplicate, for exemption from VAT for purchases in Belgium, which is document 451 (personal use); - or VAT and/or excise duty exemption Certificate (Certificate 151), in duplicate, for purchases in another EU Member State than Belgium; - or a 136 F return for import from a country which is not an EU-Member State. Exemption is not allowed for leasing or renting a vehicle for personal use! 4.5. End of VAT exemption system - regularisation VAT exemption for the vehicle is definitively acquired after 3 years, to be calculated as of the first time registration took place in the name of the title holder or in the name of a former (official) title holder in Belgium. 7
Regularisation must take place when the title holder of the exemption transfers a vehicle purchased or imported with exemption before the end of the term of three years, to be calculated as of the date of the first time registration took place in the name of the title holder or in the name of a former (official) title holder in Belgium. This regularisation of the exemption in account of the title holder is calculated pro rata temporis as based on the taxable amount when the vehicle was purchased multiplied by the remaining number of full months (x) in the time span of three years (x 36ths), to be calculated as of the date of the first time registration took place in the name of the title holder or in the name of a former (official) title holder in Belgium. A month commenced is regarded as a full month. If the vehicle to be regularised was originally purchased by another (official) title holder, this must be calculated as of the date on which the vehicle was first registered in the name of this first title holder in Belgium. As is the case with the sale of the vehicle, the following are also cause for regularisation: donation of the car, renting, making it available to a person who is not exempt or, in brief, a use that does not coincide with normal personal use by the title holder in Belgium. 4.6. End of exemption system on import duties - regularisation. When the temporary system of exemption from import duties ends because the vehicle is definitively imported into Belgium, the duties upon import must always be regularised by paying the chargeable import duties by the title holder of the exemption as soon as the vehicle is definitively imported. The following cases constitute definitive import: when a vehicle imported with a temporary exemption is sold, donated, rented or lent; when the vehicle in question is given a destination not in keeping with the personal use; when the title holder remains in Belgium after the position has been terminated. Definitive import therefore takes effect at the point in time at which the vehicle is transferred or is given a destination that is inconsistent with the personal destined use by the title holder or as of the end of the position. The duties for vehicles remaining in Belgium or in another EU Member State must be regularised as based on the value of the vehicle at the point in time at which it is transferred or at the point in time at which the incident leading to the regularisation took place. This applies, regardless of how old the vehicle is. No regularisation with payment (no duties are therefore due upon import) therefore applies in the following cases: when, upon termination of his or her position, the beneficiary leaves the EU customs territory and exports the vehicle; when the beneficiary is relocated to an EU Member State other than Belgium to hold a position there for which he or she is also entitled to a temporary exemption system for vehicles; when the beneficiary holds a position with an organisation in Belgium which applies the temporary exemption system on vehicles and he or she requests extension of the exemption granted; when the beneficiary sells his or her vehicle to a (official) title holder who also benefits from the temporary exemption system on vehicles. 8
5. ADMINISTRATIVE REGULARISATION WITHOUT PAYMENT: Subject to written justification and after examination of the dossier by the General Administration for Taxation, there may be a decision that it is only necessary to regularise the vehicle administratively (= without payment) in a number of cases, such as: 5.1. In cases of force majeure The vehicle for which exemption is granted is a total loss and the insurance company has also declared it a total technical loss. Technical total loss is understood to mean that the damage to the vehicle is such that it cannot be put on the road again. Where appropriate, a dossier containing the following details must be submitted to the Central Services of the General Administration for Customs and Excise: all the vehicle's documents (to the extent that these are not also destroyed), i.e. the original certificate of registration of the car and the original conformity certificate; a copy of all documents that were drawn up substantiating the total loss of the vehicle, for example the copy (or copies) of the assessment report(s) at the request of the insurance company (or companies) or, alternatively, copies of the official police reports constituting the accident or infringement, which were drawn up by the authorities (Belgian federal or local police or the corresponding body in the country where the accident happened) or a certificate issued by the above-mentioned authorities confirming that an official report was drawn up. 5.2. In cases of theft The dossier to be submitted to the Central Services of the General Administration for Customs and Excise contains the following: all the vehicle s documents (to the extent that the owner of the stolen vehicle has them in his or her possession), i.e. the original car registration certificate and the original conformity certificate; a copy of all documents that were drawn up substantiating that the vehicle was actually stolen, for example, the copy (or copies) of the official police report(s) constituting the theft, which was (or were) drawn up by the authorities (Belgian federal or local police or the corresponding body in the country where the accident happened) or a certificate issued by the above-mentioned authorities confirming that an official report was drawn up. It is in any event mandatory to make a statement to the Belgian police. This applies for a limited term, which is usually 1 month. However, if the stolen vehicle were to be found later, then the FPS Finance will be notified by way of the Protocol Directorate P1.1 and the situation will be reviewed. 9
5.3. When title holder passes away: The diplomatic mission must submit an application for regularisation without payment to the Central Services of the General Administration for Customs and Excise. 6. GENERAL 6.1. Vehicle maintenance and repairs The (official) title holder can only purchase goods or services (e.g. maintenance, repairs, etc.) with VAT exemption for his or her exempt vehicle (ATV (*) vignette). In that case, he or she must hand in a document of exemption together with a copy of the registration certificate to the following: - the supplier or person performing the services (e.g. garage owner) in Belgium (document 450 or 451); - the Central Services of the General Administration for Taxation upon validation of Certificate 151. 6.2. VAT on indemnification pursuant to an accident If, in the case of an accident, the (official) title holder is indemnified by insurance company (of the title holder or of the opposing party), VAT exemption may not be invoked, seeing that the costs incurred are not at his or her expense. It may therefore not be stated on the European Accident Report that the person suffering the damage can recover the VAT in any manner. 7. USEFUL ADDRESSES Federal Public Service Finance General Administration for Taxation Central Services International Relations Koning Albert II laan 33, Box 25 1030 Brussels Federal Public Service Finance General Administration for Customs and Excise Central Services Koning Albert II laan 33, Box 37 1030 Brussels 8. COMING INTO FORCE This system comes into force on 1 January 2013. Vehicles that were already purchased with VAT exemption and any import duty exemption are not included in calculating the quota stated in point 4.2. Nevertheless, the regularisation term for these vehicles included in points 4.5 and 4.6 continues to apply in full force. 10
(*) this vignette is the document with which the Central Services of the General Administration for Customs and Excise notify the Vehicle Registration Service that the respective vehicle for road transport falls under a temporary import duties exemption system and/or VAT exemption. 11