During its mid-year budgetary control, the government decided to make lawyers subject to VAT as from 1 January 2014.
In concrete terms, it means that all services provided to our clients as from 1 January 2014 will be subject to a compulsory VAT charge if the services were provided in Belgium, i.e. if the client who benefited from the services is established in Belgium. The VAT rate that will be applied is the normal 21% rate (only legal aid has a 0% rate).
The VAT taxation will often be neutralized in the case of companies and private individuals that are already subject to VAT and therefore benefit from a full tax deduction. However, this measure will penalize a large category of citizens that cannot recover the VAT, entirely or partially. It mainly concerns private individuals, exempted self-employed workers (the whole medical profession), exempted non-profit-making organizations, the non-market sector, the public sector, and the banking and insurance sectors, as well as part of the real estate sector.
Needless to say, our firm is doing everything possible in order to reduce the impact of VAT on our fees for the above-mentioned sectors.
If you have any questions about this, we suggest that you contact the partner in charge of your case in order to check if some of the transitory measures stipulated in the 20 November 2013 administrative circular could be applied in your case.