New draft VAT legislation reshapes the place of supply rules for virtual streaming services and the rules applicable to the (re)sale of works of art

1. Place of supply for virtual streaming services Under current Belgian VAT law, the place of supply for admission to cultural, artistic, sporting, scientific, educational, and entertainment events is determined by the location where the event physically takes place. This rule also applies when participation occurs virtually (e.g. live streaming). To avoid forum-shopping for the organisation of virtual events, the place of supply rule will be shifted to the member state of the customer, both in B2B and B2C transactions.
2. (Re)sale of works of art Currently, the sale of works of art, collectors' items and antiques in Belgium is subject to a reduced VAT rate of 6% in limited circumstances. Separately, the margin scheme allows taxable resellers to apply 21% VAT to the profit margin realised on such goods, rather than on the total sale price. This rule applies regardless of whether the reseller acquired the goods with VAT at the reduced rate of 6% or at the standard rate of 21% (in both cases from a taxable person) or with residual non-deductible VAT (from a non-taxable person).

The draft bill makes the reduced VAT rate of 6% the default for works of art, collectors' items and antiques. To prevent distortions of competition, resellers will no longer be able to utilise the margin scheme where they have acquired the goods with 6% VAT (from a taxable person); instead, the subsequent supply of those goods will be subject to the reduced VAT rate of 6%.

Key takeaway / recommendation

The changes will enter into force on the date of the law's publication in the Belgian Official Gazette, without any transitional measures. Therefore, providers of streaming services and resellers of works of art, collectors’ items and antiques must make immediate preparations to ensure compliance with the adjusted VAT treatment. They should also consider whether they need to make any modifications to their business model as a consequence.

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