On 29 June 2016, the Belgian Parliament adopted the ‘programme law’ (introduced on 2 June 2016) that contains the introduction into Belgian tax law of specific transfer pricing documentation requirements (published in the Belgian Official Gazette of 4 July 2016). These requirements are based on Action 13 of the OECD /G20 BEPS Project. See our post of 9 June 2016. Only minor adjustments with no effect on the technical content of the draft programme law were made.
The relevant articles of the programme law introduce a three-tier documentation approach as provided under BEPS Action 13: Master File, Local File and Country-by-Country Reporting. According to the newly adopted documentation requirements, Belgian entities of a multinational group that exceed one of the following criteria
- operational and financial revenue of at least 50 million euros (excluding non-recurring revenue);
- balance sheet total of 1 billion euros; or
- annual average number of employees of 100 full-time equivalents;
need to submit to the tax authorities a master file and a local file (the detailed form that is part of the local file only when at least one of the business units of the entity has realised intra-group cross-border transactions of more than 1 million euros).
Belgian ultimate parent entities of a multinational group with a gross consolidated group revenue of at least 750 million euros should file a country-by-country report. Under certain conditions the Belgian entity that is not the ultimate parent entity of the multinational group may be required to file the county-by-country report directly with the Belgian tax authorities.
The master file and country-by-country report should be filed no later than 12 months after the last day of the reporting period concerned of the multinational group. The local file, however, should be filed with the tax return concerned.
The programme law also introduces specific transfer pricing documentation penalties, ranging from 1.250 to 25.000 euros.
Currently the Royal Decrees covering the implementation measures of the newly adopted documentation requirements are being drafted. It is expected that these implementation measures will be finalised by the end of September or early October 2016.
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