WRITTEN QUESTION E-1615/98

by Elly Plooij-van Gorsel (ELDR) to the Commission

(27 May 1998)

Subject: Problems for non-Belgian businesses with the collection of VAT in Belgium

A Netherlands business operator wishing to set off VAT in Belgium against income earned in Belgium is required by the Belgian State, in addition to his application for a VAT number, to designate a local representative. This person represents the Netherlands business operator in Belgium and may also be held liable. The State requires this person to provide a minimum bank guarantee of BEF 300 000, even when the estimated amount of VAT to be deducted is considerably less.

Is the Commission aware of this Belgian law on the collection of VAT from non-Belgian EU citizens?

Is the Commission aware that this law gives rise to many problems, since business operators have difficulty in finding a local representative willing to stand surety for a minimum of BEF 300 000?

Does the Commission consider that this requirement to designate a local representative constitutes an obstacle to the free movement of goods and services in the internal market?

If so, what does it propose to do about it?

Answer given by Mr Monti on behalf of the Commission

(13 July 1998)

The Honourable Member would draw the Commission's attention to the difficulties encountered by Dutch enterprises which are subject to VAT in Belgium but not established there. She refers in particular to the requirement laid down by Belgium to designate a tax representative and to provide a bank guarantee of at least BEF 300 000.

By exercising an option provided for in Article 21 of the Sixth VAT Directive (77/388/EEC(1)), Belgian legislation does indeed require the designation of a tax representative who will be liable to pay tax in place of the non-established taxable person. The tax administration may, if it deems it necessary, require the representative to provide a bank guarantee. The requirement for this guarantee to be at least BEF 300 000 in every case was, however, revoked with effect from 1 September 1996.

The Commission is aware of the difficulties encountered by non-established enterprises in designating a tax representative, whose legal obligations in most Member States are extremely cumbersome. For these enterprises, such difficulties constitute an obstacle to the development of their business which is not easily reconciled with the spirit of the single market.

These difficulties were highlighted in a report from the Commission to the Council and Parliament on arrangements for taxing transactions carried out by non-established taxable persons(2). The Commission took that opportunity to call on the Member States to review their legislation with a view to introducing greater flexibility so that excessive constraints were not imposed on non-established taxable persons.

Given that those recommendations were not sufficiently implemented by the Member States and that the resulting difficulties were highlighted by the SLIM team (Simpler Legislation for the Internal Market) in October 1997, the Commission has undertaken to present in the near future a draft directive which would amend Article 21 of the Sixth VAT Directive in such a way as to ease the burden of obligations on non-established taxable persons.

(1) OJ L 145, 13.6.1977.

(2) COM(94) 471 final.