How much VAT should I apply for my SaaS application? a Belgian view


We are a Belgian company based in Brussels about to release a Software as a Service (SaaS) application in a few days named StratEx; StratEx is a web solution aligning your Portfolio – Programme – Project management (PPM) practice with your Business strategy; easily and affordably.

tax scrabble - credits: thestateofme.com

tax scrabble – credits: thestateofme.com

A Belgian company releasing a SaaS application accessible worldwide

It is time to understand the in-outs of the application of the Value Added Tax (VAT) to our beloved customers whether they are liable to the VAT or not.

PS: the rules were gathered during a conference with our Belgian Federal Finance department.
PS2: off course, we are not liable for any mistake etc. etc. 😉 We do invite you to check with your preferred lawyer  (we can share some names if necessary).
PS3: fell free to comment and provide us with your comments.

A Belgian company sells online services to another company (B2B)

The European Union gives access to the VAT Information Exchange System (VIES) database, single point of contact to query all the national VAT system: http://ec.europa.eu/taxation_customs/vies/

Based on the result of the query, ALT-F1 will know if the company subscribing to StratEx is liable to the VAT or not.

  • if VAT number is valid against VIES we apply the following VAT
    • 21% for Belgian-based company
    • 0% for European-based company (excluding Belgium) – commonly called Intra-community (INTRACOMM) taxation
  • if VAT number is invalid against VIES we apply
    • 21%  for the alledged European-based company
  • 0% for non-EU based company

A Belgian company sells online services to a consumer (B2C)

For a consumer it is easier. He/she won’t provide a VAT number; they are two cases; We apply the following VAT:

  • 21% if the customer is EU-based (check against VIES-database countries-list) :
  • 0% if NON EU-based customer; the customer should comply with his/her national laws !!!

PS: there is a rule to be confirmed for B2C purchase: if ALT-F1 sells more than ±12.000 EUR to foreigners within the EU we need to setup a company inside that particular country !!!

For info: the previous rule will change in 2015; Belgian Tax services (more widely the European tax services) will have to collect the VAT nationally (for all international purchases) and dispatch the tax to foreign countries.

VIES Database for MBAs

The VIES database is accessible online http://ec.europa.eu/taxation_customs/vies/. the use types in the company details and receives a swift feedback regarding the status of the company.

Nevertheless, your tech team may access a web service directly accessible from your IT system and provide a great experience to you customers.

Technically it isn’t too hard, 15 man/days should be sufficient to integrate the online free-service; We can help you if necessary.

VIES Database for techies

VIES is accessible through a WSDL (no REST API is available yet):

The endpoint is http://ec.europa.eu/taxation_customs/vies/checkVatService.wsdl

How to collect the VAT status of a EU-based company?

  • call the method ‘checkVat’ with 2 parameters ‘countryCode’ and ‘vatNumber’ parameters

Here is a sample of a successful call to the web service:

“vat”: {
“countryCode”: “BE”,
“vatNumber”: “0830560718”,
“requestDate”: “2014-01-15+01:00”,
“valid”: true,
“name”: “ALT-F1”,
“address”: “Somewhere in Brussels”
}

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2 comments

  1. Rudolf de Schipper · · Reply

    Great post, thanks, really interesting!

  2. Thanks a lot. Great post!

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