Are you starting logistics operations in Flanders or Europe? Below is the 4th of 5 possible business scenarios – ranging from a representative office to a fully-fledged international distribution center – for structuring your logistics activities.
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European Distribution Centers and regional warehouses
Flanders — and particularly the province of Limburg — offers the high-rate logistics know-how and support we need.
Both the ports of Antwerp and Rotterdam are just around the corner.
General Manager, Hyundai MOBIS Europe
- EDC (European Distribution Center) set up as a Belgian legal entity.
- EDC owns goods, stored in regional warehouses.
- EDC delivers VAS to regional warehouses and employs staff locally.
- Possibility of setting up PEs (regional warehouses) of a Belgian entity in other EU countries.
- Belgian entity is taxable in Belgium.
- Taxable profits of EDC can be determined on a cost-plus basis.
- Upfront ruling can be obtained on low mark-up.
- Belgian EDC can claim Notional Interest Deduction (FY2013: 3%) for equity invested in the Belgian PE.
- Belgian EDC has no foreign PE if only storage activities in foreign countries, dependent on tax treaty; all profits are taxable in Belgium.
- If deemed a foreign PE, arm’s length profit allocation is required; profit of a foreign PE is exempted in Belgium.
- Belgian VAT registration is needed, full (VAT) bookkeeping obliged.
- If goods are stored in regional warehouses in other EU countries, the Belgian EDC may need to register for VAT in those countries.
Supply of goods to Belgian, EU or non-EU customers by the Belgian EDC is in principle subject to VAT:
- VAT exemption is possible for intra-EU supply of goods and export supplies to non-EU.
- Local VAT is due if goods remain in Belgium.
- VAT treatment of cross-border supplies depends on terms of supply.
- To avoid pre-financing import VAT, an import VAT deferral license (a so-called ET 14.000 license) can be obtained without any cash guarantee. Align customs value to the transaction price.
- A ruling in respect of classification, origin and customs value is advisable.
- cross-border authorizations and centralized customs clearance.
- Belgian input VAT can be deducted via the periodical VAT return
- VAT credits are refundable on a quarterly basis; for “export” businesses, a license for monthly refunds is available.