Reverse charge VAT when selling to Belgian businesses from Shopify

Selling from your Shopify store to a Belgian business? Then the question is: do you charge VAT, or is it reverse charged? The answer depends mostly on where you are established. An overview.

First: where are you established?

So reverse charge is mainly about cross-border sales. A Belgian store selling goods to a Belgian business normally just charges Belgian VAT. Domestic reverse charge does exist in Belgium, but only for specific cases such as certain construction work. For a regular online store it rarely applies.

Intra-Community supply: the conditions

If you sell goods from another EU country to a Belgian business, you can charge 0% VAT when these conditions are met:

• the customer is a business with a valid VAT number in another EU member state, and that number is on the invoice;
• the goods are actually transported to that other country, and you can prove it (for example with transport documents or tracking);
• you include the supply in your EC Sales List (the ICP-opgaaf in the Netherlands, the intra-Community listing in Belgium).

For services to a business in another EU country a similar rule applies: the VAT is reverse charged to the customer.

The VIES check

You check whether a VAT number is valid in VIES, the European Commission's VAT information exchange system. Do it for every order, or at least for every new customer, and keep the result. A number that has the right format but isn't active in VIES doesn't entitle you to 0%. In that case you charge VAT as you would for a consumer.

What must the invoice say?

• your own VAT number and your customer's VAT number;
• 0% or no VAT amount on the lines concerned;
• a note explaining why no VAT is charged.

Common wording is “Intra-Community supply of goods, exempt under Article 138 of Council Directive 2006/112/EC” for goods and “VAT reverse charged, Article 196 of Council Directive 2006/112/EC” for services. A reference to the national provision is also allowed; for a Belgian seller that is Article 39bis of the Belgian VAT Code. In a Peppol invoice the lines also get the right VAT category (K for an intra-Community supply, AE for reverse charge).

How Shopify handles this

Shopify calculates VAT based on your tax settings and the customer's address. In the standard checkout, Shopify doesn't automatically know that a customer is a business with a valid VAT number. Common ways to deal with that:

• A fixed business customer account in Shopify with tax collection turned off (a customer-level tax exemption).
• On Shopify Plus: B2B with company profiles and tax settings per company location.
• Refunding the VAT when a business customer provides a valid VAT number afterwards.

Whatever you choose, your invoice must match what the customer paid. If Shopify charged VAT, you can't simply send a 0% invoice afterwards. Discuss with your accountant which approach fits your store.

How PeppolKit handles it

• PeppolKit checks a business customer's VAT number live with VIES for every order.
• Based on your country, the customer's country and the type of product, it picks the right VAT treatment: domestic VAT, reverse charge, OSS or export.
• For reverse charge, it puts both VAT numbers and the legal note on the invoice, and the right VAT category in the Peppol file.
• If Shopify charged VAT on an order that should have been reverse charged, you get a warning, so you can refund the VAT or set up an exemption for that customer.
• If the VAT number isn't valid in VIES, the customer is treated as a consumer for VAT.

Also read e-invoicing in Belgium or see pricing.

Frequently asked questions

An explanation for orientation, not tax advice. VAT rules depend on your situation; check with your accountant or your tax authority.