Belgium considers introducing mandatory transfer pricing documentation following the outcome of the BEPS Action Plan


The Belgian Minister of Finance, Johan Van Overtveldt, shared some new insights about the government’s ambitions in the area of transfer pricing as part of his reply to a parliamentary question on Wednesday 11 March 2015 (CRIV 54 COM 111 –Parliamentary Question no. 2774). The Minister referred to the OECD project in relation to Base Erosion and Profit Shifting (‘BEPS’) and endorsed the recommendations in relation to transfer pricing documentation and country-by-country reporting (Action Point 13).

Following the OECD recommendations of September 2014, the Belgian Government envisage introducing formal transfer pricing documentation requirements given that such a measure would contribute to more transparency, efficient audits and increased legal certainty. A feasibility and benchmark study on the introduction of mandatory transfer pricing documentation regulations is already in progress and included as part of the 2015 operational plan of the Belgian tax administration.

Minister Van Overtveldt stressed that clear rules in relation to the burden of proof should be established as part of a potential implementation and also highlighted the complexity of determining arm’s length prices in a global environment. In this respect he emphasised that transfer pricing disputes are not black or white and should not by definition be regarded as tax fraud to which specific penalties or sanctions apply. The Minister confirmed that there should also be no (automatic) extension of the normal statutes of limitation for transfer pricing disputes.

As a final note, the Minister also highlighted that the specialised transfer pricing investigation team will again receive additional staffing in order to conduct transfer pricing audits in Belgium. A third season of transfer pricing audits is currently in progress whereby 200 companies have been selected for an in-depth audit.

More information regarding these transfer pricing audits can be found here.