Beginning in February of 2018, the Belgian tax authorities will initiate a new wave of transfer pricing (TP) audits. The central transfer pricing investigation team (TP Unit) is investing in additional manpower and changing investigation approaches to increase the effectiveness of audits. Taxpayers should also expect more scrutiny on TP matters from other tax departments, such as the Large Companies Department and the Special Tax Inspectorate (BBI/ISI), given specific training was recently conducted to educate these field inspectors on new international tax developments and given the enhanced collaboration protocols those tax departments now have with the TP Unit. Taxpayers may also be increasingly faced with joint/multilateral audits and the international exchange of information through such audits. The TP Unit is teaming with foreign tax authorities more frequently to conduct investigations and check consistency of taxpayer information.
Although the selection, approach, and criteria used to conduct an audit will remain largely unchanged for 2018, it is expected that the process will change starting next year, when the Belgian tax authorities will have access to Country-by-Country Reporting data, the Master File and the Local File/specific Belgian Local Form. Fuelled by international tax developments and new information reporting requirements, the TP Unit is keen to focus on certain topic areas such as intangibles, financing, procurement-related arrangements and (captive) re-insurance as part of its new TP audit wave.
We refer to a Tax Insights newsletter on Transfer Pricing, Tax Controversy and Dispute Resolution in this respect, which you can read here.
For more insights and to understand the implications for your organisation, please contact Bram Markey.