Tax policy directorate – Bureau a

B. VAT IS A REAL TAX 
Liability to VAT is determined by the type of the transactions or products concerned, regardless of the 
personal situation of the liable person or customer. 
Accordingly, VAT is levied on goods supplied and services provided: 
• 
In the context of an economic activity (whatever the type) 
• 
For valuable consideration 
• 
By a liable person, i.e. a person independently performing transactions that fall within the scope 
of VAT 
Activities carried on by legal entities governed by public law in their capacity as public authorities fall 
outside the scope of VAT except where non-liability leads to a distortion of competition. 
Various exemptions exist, including: 
• 
Teaching 
• 
Medical and paramedical activities and hospital care and medical treatment costs 
• 
Public interest organisations 
• 
Insurance and reinsurance and the provision of related services 
• 
Some banking operations (the granting and negotiation of credit, the grantor's management of 
credit, the negotiation and assumption of commitments, guarantees and other forms of security 
interest, the management of credit guarantees by the grantor of the credit, etc.) 
Voluntary taxation is available as an option for some exempted activities, such as the letting of 
undeveloped real property for business use, the letting of rural property, banking and financial 
transactions normally exempt from VAT, etc. 
C. VAT IS AN INDIRECT TAX PAID IN FRACTIONS 
VAT is finally borne by the end-user since it is included in the sale price of products or services. Each 
intermediary (manufacturer, retailer, etc.) collects the tax provided for by law from the customer and 
pays it on to his local tax office, minus the VAT on inputs paid to his own supplier. VAT is a tax on 
value added, i.e. the value added to the product or service at each stage of production or marketing, 
such that at the end of the economic chain through which the good or service reaches the buyer, 
whatever its length, the overall tax burden corresponds to the tax calculated on the final sale price to 
the consumer. 

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