Local File for assessment year 2018 – Don’t wait until the due date is near!

Written by Tim Pieters 23 April 2018


In line with the three-tier documentation approach as provided under the OECD’s BEPS Action Point 13, Belgium has enacted specific transfer pricing (TP) documentation requirements into its tax law. This alert focuses on the Local File, which specifically requires reporting on intercompany transactions. Given the complexity of the matter, we recommend not waiting until the due date is near.

What?

A Belgian entity of a multinational group exceeding one or more of the following criteria for assessment year 2017 (FY ended 31 December 2016 and subsequent FYs) has to submit a Local File for assessment year 2018 (FY ended 31 December 2017 and subsequent FYs):

  • operational and financial revenue of at least 50 million euros
  • balance sheet total of 1 billion euros
  • annual average number of employees of 100 full-time equivalents

For assessment year 2017, only Part A covering the general information on the Belgian entity (and part C) of the Local File had to be completed and filed.

From assessment year 2018, the full document has to be completed and filed, so including part B of the form. Part B concerns detailed transactional information on cross-border intercompany transactions at business unit level. Only in case the cross-border intercompany transactions within a business unit level are below the EUR 1 million threshold part B should not be completed for the respective business unit.

When completing part B, some of the points requiring special attention are the availability of segmented data, data on a cash versus accrual basis, and formal TP documentation.

Further information on the Belgian TP documentation and reporting requirements can be found here.

When?

The Local File should be submitted on the same date as the filing due date of the Belgian corporate income tax return.

In principle, the due date for filing the Belgian corporate income tax return for assessment year 2018 is set at 30 June 2018 (i.e. 6 months after FY closing). However, the Belgian tax authorities have communicated that the effective due date for filing the corporate income tax return is 27 September 2018.

How?

The Local File (i.e. form 275 LF) should be submitted electronically via the tax authorities’ MyMinfinPro website in XML format. Appendices can be filed in a searchable PDF format. On a case by case basis it should be assessed whether a tolerance in filing procedure can be applied. Even when using this tolerance, it should be noted that – in addition to PDF filing – XML filing will be required in this situation.

The filing procedure is similar to that applicable to the Master File. The administrative tolerance of the filing procedure has, however, become stricter.

For more information on the filing procedure click here.

Need help?

Given the complexity of part B of the form, we recommend you not to wait until the due date is near.

We indeed advise the companies concerned to start preparing an overview of their intercompany transactions and identifying the data to be collected as well as the potential pitfalls and related solutions linked to this Local File. We strongly recommend having a first draft Local File available by the end of June 2018. The time needed to prepare the Local File for the first year cannot be underestimated.

Our experts are available to provide support and to help you meet this obligation in the most efficient manner. They have the required knowledge and expertise to help you fully understand and comply with the new TP documentation requirements, e.g. during a workshop that can be planned with your local PwC advisor.

So should you have any questions or require any assistance in this domain, we would be glad to be of service.

Contact us
Tim Pieters
Director
+32 2 7109328