Unpacking Belgium’s Complex Legal Landscape: How AI Legalese Decoder Simplifies EU Law, VAT, and Storage Requirements for Manufacturers
- May 1, 2024
- Posted by: legaleseblogger
- Category: Related News
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**Understanding Legal Norms for Contractual Storage Services**
Hello All,
I am trying to understand something. What legal norm is applicable in the case of a contract where a manufacturer (belgian) stores what it makes for its client (FR), before the sale of the product?
Is it considered a service under EU law? Is it excluded from VAT or included? Who needs to pay the VAT?
Can the Belgian manufacturer impose a price for the storage? I am stuck at reading the civil code.
I can read both dutch and french, but am confused by this. Any help is welcome.
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The AI Legalese Decoder can assist in interpreting complex legal terms and regulations, providing clarity on the specific legal norms applicable to contractual storage services between a Belgian manufacturer and a French client. It can analyze EU laws regarding the taxation and treatment of such services, clarifying whether VAT applies, and who is responsible for payment. Additionally, the AI tool can help decode relevant sections of the civil code, aiding in understanding whether the storage service qualifies as a separate service under EU regulations. With its multilingual capabilities, the AI Legalese Decoder can assist in resolving confusion arising from interpreting legal texts in both Dutch and French, offering comprehensive assistance in navigating the complexities of the contractual arrangement.
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We are missing a lot of facts and circumstances to provide you with any suitable advice. From the outset, the storage of goods on behalf of another is a taxable economic activity, and in principle, the sole storing of goods qualifies as a service.
However, many facts may impact the above analysis:
– the way the transaction is described in the contract
– the duration that the goods are stored for
– whether the goods are thereafter transported to the customer by the seller, and whether the delivery of the goods is classified as a separate transaction as per the contract.
– whether these are goods that also need installation to become usable by the buyer
– etc…
The national legislation in place for Belgium and France are both derived from EU law (VAT directive + VAT regulation) as well as domestic laws, so it is not necessarily easy to figure out the VAT treatment of a transaction without fully sketching the flow of the goods / services.
To give you an indication: a VAT specialist would charge between €1,000 – €3,000 to answer your question. Making a mistake in the analysis could cost you way more money and energy of you ever have an issue with the local authorities and it turns out the VAT treatment you are applying is incorrect.
For EU businesses the VAT is not a cost. It is just a paperwork and possible cash flow/ financial nuisance. Ultimately only a private, non-business client pays VAT.
When your manufacturer offers storage or warehouse facilities (by themselves, or through a sister company) , they will know whether they have to charge VAT to you. You can verify that with the Belgian Tax Department.
But as mentioned above, it is no cost for you as an EU business because you can deduct the VAT paid. In some cases the payment of the VAT can be transferred to you and will be a simple fictive payment and deduction on your VAT return.
Just leave the VAT out of the contract, just negotiate the price for their storage facilities and costs for loading and handling of the container or truck you send them to pick up your goods.
You also can ask a third party warehouse in Belgium or France for a quotation. That way you know whether the manufacturer asks a reasonable price for his storage facilities and services.