Payments to Cyprus and Luxembourg: subject to new reporting obligation, screen your existing structures


Payments by Belgian companies of over EUR 100K (in total) to recipients in Luxembourg and Cyprus must now be reported individually in a specific form to the tax authorities. If not, they risk being non-deductible for tax purposes.

Besides the additional reporting effort that this entails, it also sheds light on those payments which are subject to an additional burden of proof.

If you have financing, I.P. or other service companies in Cyprus or Luxembourg which receive payments from Belgium, ask yourself whether your structure would stand the test.
The following attention points should particularly be considered:

  • Sufficient economic substance, functions and risks at each layer
  • Arm’s length nature of the intra-group flows

Needless to say that, also for future investments structures the impact of new changes in the Belgian tax landscape such as the new reporting obligation needs to be considered. The past, as they say, is history.

For more information on the tax technical analysis surrounding this new reporting obligation, see the post of 8 September 2015 by our Corporate Tax Partner Philippe Vanclooster: click here

If you have any questions on the above or would like to discuss how this may affect your Belgian tax situation, please contact the undersigned:

Jan Muyldermans, Lead Transactions Partner – or +32 2 710 74 23