2026-04-18 · 8 min read
VAT reverse charge: when must you apply the Belgian co-contractor (medecontractant) rule?
If you are a contractor, electrician, roofer, or plumber in Belgium, you have probably heard of the co-contractor scheme (medecontractantregeling). But when exactly does it apply? And what changed in 2023? This article walks you through it in plain language.
What is the co-contractor scheme?
It is a specific form of VAT reverse charge. Normally you charge VAT on your invoice and pay it to the tax office. Under the co-contractor scheme, your client (the co-contractor) handles the VAT in their own return, not you as the supplier.
On the invoice the VAT amount is €0. Your client then processes the VAT in their periodic return, provided they meet the conditions.
Legal basis: Royal Decree no. 1, article 20 of the Belgian VAT Code.
Two conditions: both must be met
Condition 1: the supply must be works on immovable property. Think construction, renovation, roofing, painting, floors, electrical and plumbing fixed to the building, garden works permanently attached to the plot, and fixed installations.
Pure services such as consultancy, IT, transport, or equipment rental without works on immovable property do not fall under this scheme.
Condition 2: your client must be a Belgian VAT taxpayer who files periodic VAT returns (monthly or quarterly) and must be established in Belgium or have a recognised liable representative.
When you must not use it
If any of the following applies, issue a normal VAT invoice instead.
| Situation | What to do |
|---|---|
| Private individual customer | Normal invoice with VAT (21% or 6% as applicable) |
| Small exempt business (turnover under €25,000) | Normal invoice with VAT |
| Client has a VAT number but does not file periodic returns | Normal invoice with VAT |
| Works outside Belgium | Follow the VAT rules of the country where the work takes place |
What must appear on the invoice?
From 1 January 2023 the words “VAT shifted” alone are no longer enough. You must add the full statutory paragraph about the shift of liability, the one-month dispute period, periodic returns, and liability if the condition is not met.
Using PepCerto, choose the “Co-contractor” VAT scheme on your invoice: the system sets VAT to €0, inserts the 2023-compliant text, and uses the correct PEPPOL codes for electronic invoicing.
Practical examples
Applies: an electrician invoices a main contractor for installation work on a new-build site. Both file periodic returns. Use the scheme, €0 VAT on the invoice.
Does not apply: a roofer invoices a private homeowner. The customer is not a VAT taxpayer. Use a normal invoice with VAT.
Does not apply: an exempt hairdresser with a VAT number but no periodic return. Use a normal invoice with VAT.
Does not apply: you only supply materials without installation as works on immovable property. Use a normal invoice with VAT.
VAT return grids (Belgium)
As the supplier issuing the invoice: grid 45 for the amount excl. VAT of the works, and no VAT charged on the invoice.
As the recipient (co-contractor): grid 87 for the amount excl. VAT, grid 56 for VAT due (often 21%), grid 59 for deductible VAT if you have a right to deduct. In many cases grids 56 and 59 offset so you pay little or no net VAT, but you must still report correctly.
If you apply it wrongly
The tax authorities take this seriously. As supplier: charging VAT when you should have shifted can block your client’s deduction; missing mandatory wording can lead to penalties; applying the scheme to a client who does not qualify can leave you liable for the VAT.
As client: failing to declare can trigger reassessment plus interest (for example 7% per year) and penalties (often 10% to 40%). Since 2023 the client also bears more responsibility if they let the scheme apply when they are not eligible.
Checklist before you send the invoice
Your client has a valid Belgian VAT number.
Your client files periodic VAT returns.
The work qualifies as works on immovable property.
The invoice shows €0 VAT.
The full mandatory legal wording (2023 version) is on the invoice.
You book grid 45 in your VAT return as the supplier.
How PepCerto helps
Select the “Co-contractor” option when creating your invoice. PepCerto sets VAT to €0, adds the mandatory wording, applies the correct PEPPOL or UBL codes, and aligns with Belgian VAT return logic including grid 45 for sales.
If you are unsure about a borderline case, ask your accountant.
Sources: Royal Decree no. 1, art. 20 Belgian VAT Code; Royal Decree of 28 October 2022; FPS Finance; ruling E.T. 122.360.