VAT for Diamond Companies

All persons carrying out an economic activity on a regular and independent basis, and providing goods or services which are not fully exempt from VAT by law, must charge value added tax (VAT) and must therefore register for a unique VAT number.

Special regulations apply for the Belgian diamond industry and some transactions with regards to diamonds are exempt VAT.

VAT is calculated on the tax base at a rate, which depends on the nature of the transition, which can be:

• 6 % mainly for basic products and social services;
• 12% for certain goods and services which are economically or socially important;
• 21% for all transactions of goods or services which do not fall under the other two categories.

Special regulations apply to the Belgian diamond industry. According to articles 40 §1 and 42 § 4 of VAT-legislation (Wetboek van de Belasting op Toegevoegde Waarde) the following transactions with regard to diamonds are exempt from VAT:

Supply of unmounted diamonds to  Belgian registered diamond traders (including diamond manufacturers) exclusively trading in unmounted diamonds;

Import of unmounted diamonds by Belgian registered diamond traders (including diamond manufacturers) exclusively trading in unmounted diamonds;

Services with regard to unmounted diamonds provided to Belgian registered diamond traders (including diamond manufacturers) exclusively trading in unmounted diamonds.

The export of goods – including diamonds – performed by (or for the account of) the trader (in this case, the Belgian diamond trader) is always exempt from VAT  (art. 39 VAT-Legislation).

Belgian diamond traders, also acting as diamond jewelers, can not profit from the VAT exemption in articles 40§1 and 42§4.

No other import or export duties are due for Belgian diamond traders.

For more information, it is advisable to contact an accountant.