Belgian excise duty refund in group structures: the rental agreement as key

Fleet within a group: a common structure

Within large transport organisations, it is common practice to divide business activities across multiple legal entities. Think of one entity for container transport, another for specialised transport such as flower delivery, and a separate entity that holds the vehicle fleet. The vehicles are leased from that fleet entity to the operating companies that actually carry out the journeys.

This is a logical and fiscally sound structure. However, for the Belgian excise duty refund, this setup brings a specific requirement that is regularly overlooked in practice.

The Belgian requirement: one entity per vehicle

For the excise duty refund on professional diesel in Belgium, a vehicle may only be actively registered under one entity at a time. The Belgian tax authority does not accept a refund for a vehicle that is simultaneously registered under multiple licences, even within a fiscal group.

To apply for an excise duty refund, the requesting entity must demonstrate that it had the vehicle in use at the time of refuelling. This requires two documents:

• A copy of the vehicle registration certificate
• A valid rental agreement between the fleet entity and the operating company

The pitfall: open-ended rental agreement

In practice, we see that groups sometimes work with an open-ended rental agreement that includes a clause stating that the allocation of which vehicle was used by which entity during which period, and at what rate, will be determined retrospectively.

This construction does not meet the Belgian requirements. The rental agreement must demonstrably be valid for the specific vehicle at the time of refuelling. A retrospectively determined allocation provides insufficient evidence and leads to rejection of the refund application.

The solution: short-term rental agreements per entity

The correct approach is to work with short-term rental agreements of a fixed duration. For each period, it is recorded which vehicle has been leased to which operating company. Once the period expires or the vehicle transfers to another entity, a new agreement is drawn up.

In this way, for each refuelling it is demonstrable:

• Which entity had the vehicle in use during that period
• That the vehicle was not simultaneously registered under another licence
• That the rental agreement was valid at the time of refuelling

Practical considerations

When setting up this structure, a number of things are important:

• Ensure a clear start and end date for each rental agreement
• Keep all agreements per vehicle and per period carefully filed
• If an agreement overlaps with another entity, a refund for that period is not possible
• Align rental periods with the quarterly excise duty refund filings

Let professionals guide you

The combination of a group structure and the Belgian excise duty refund requires careful administration. Delta Refund Solutions helps you set up the correct documentation and assesses each quarter whether your file meets the Belgian requirements.

Are you setting up a new entity within your group in the near future? Do not forget to apply for an excise duty licence in time to avoid missing out on refunds. Read in our article on the Belgian excise duty licence how to do this.

Feel free to contact us, we are happy to help.