The latest annual report of the Belgian Ruling Office was issued on June 21st. Looking at the statistics, it is clear that 2016 was a positive year with an increase in both the number of rulings granted and the number of pre-filing meetings held. The increase in the number of positive decisions combined with the number of pre-filings demonstrates the continued usefulness of discussing files with the members of the ruling office during a pre-filing meeting and to obtain transparent insights into the feasibility of obtaining an advanced decision on a certain matter.
An equally positive trend is the time required to obtain a ruling decision. Whilst in 2007 the average time was 97 days, the ruling office has been able to reduce this to 65 days in 2016. What we observe in practice is that those files that have been thoroughly debated throughout the pre-filing stage and for which an effective exchange of information has taken place between the ruling office and the taxpayer are also the ones that are most swiftly resulting in an advanced decision.
Besides, 2016 also witnessed an equal spread of requests being filed by small and medium enterprises and large enterprises on a similar range of topics (with the exception of transfer pricing requests which are mostly being filed by large enterprises). The top 3 of most requested rulings consists of restructurings, internal capital gains and transfer pricing, not taking into account the rulings covering costs proper to the employer.
Finally, the report also provides an overview of the rulings that have been exchanged. In 2016, Belgium exchanged 29 rulings spontaneously whilst 420 rulings were exchanged with other countries as a result of Action 5 of the OECD’s Base Erosion and Profit Shifting Action Plan. This number equally includes a retro-active exchange and thus covers more rulings than those granted in 2016 alone.
The report thus clearly demonstrates that taxpayers continue to pursue advance certainty in an era of increased disputes (often resulting in economic double taxation) and uncertainty on the evolution of the tax landscape. Nevertheless, we notice that taxpayers are also increasingly considering the exchange mechanism in weighing off the benefits of a unilateral ruling versus a bilateral/multilateral ruling especially for transfer pricing related topics, the effect of which might become apparent in the published statistics in the years ahead.
The annual report can be accessed here in French or Dutch.
For any questions, please get in touch with your local PwC contact or Jonas Van de Gucht.
