VAT rate applicable on transportation of goods in e-commerce.
The easiest answer is when the transportation has been performed by a third party, e.g. courier service or transportation company. In that case the normal rate of 21% (in Belgium) will be applicable. The customer will pay directly to the transportation company and the relationship is between the transportation company and the customer. This remains the same if the seller of the goods has pre-paid the transportation costs and adds them to taxable amount.
But what if the transportation concerns several groups of products subject to a different VAT rate? What if we sell shoes and books for instance? Shoes are taxed at a 21% rate, books are taxed at the 6% rate. Do we have to split the transportation cost and allocate the respective cost to the respective rate? In that case the Belgian tax authorities allow that the transportation cost is subject to the lowest VAT rate applicable on the goods, in our example the 6% rate. Condition on the other hand is that the goods taxed at the lower rate will be delivered and transported together with the goods at the higher rate.
VAT and payment services
Payment services generally fall under services rendered by financial institutions and are therefore VAT exempt. (Article 44 VAT code), nevertheless service providers of payment services can opt, under certain circumstances for the applicability of VAT based on article 44, §3, 8° of the Belgian VAT – code. When doing so, these service providers regain their right of VAT deductibility on the goods and services they have obtained with VAT. The application of article 44, §3, 8° Belgian VAT code has to be considered as an exception. Generally no VAT will be charged on payment services.