Financial Crime World

Belgium Enhances Funds Transfer Reporting Requirements

The Belgian government has introduced new regulations regarding funds transfer reporting requirements for multinational companies operating within the country. The changes, which took effect on July 15, 2024, impact both the Local File Form (275.LF) and the Master File Form (275.MF), as well as the country-by-country notification form (275.CBC.NOT).

Update to Local File Form

The new Royal Decrees of June 16, 2024, update the models for the Local File Form and the Master File Form. Qualifying taxpayers must submit these updated forms through the online portal for financial years starting on or after January 1, 2025.

Changes to Local File Form

  • The Local File Form now requires a detailed overview of intercompany transactions per business unit with cross-border transactions exceeding €1 million.
  • Framework agreements or model contracts for intercompany transactions must be submitted together with the form in a readable PDF format.
  • Specifications on relevant countries included in cost contribution agreements, Advance Pricing Agreements (APAs), rulings, and in-house (re)insurance policies should be disclosed.

Update to Master File Form

The Master File Form also underwent changes:

  • An analytical framework for the value chain and functional analysis of the group is now expected to be included. This requires a more detailed value chain analysis as well as a comparison and alignment with transfer pricing outcomes.
  • More detailed information on DEMPE functions with respect to intangibles, including a list of transferred hard-to-value intangibles, is required.

Update to Country-by-Country Notification Form

Country-by-country reporting notifications have also been updated:

  • The notification form now requires indicating whether the submitted form is a first notification, a modification of a previous notification, or a termination of the notification obligation.
  • Form 275.CBC.NOT must be filed in case of termination of the notification obligation.

Action Required

Belgian tax resident companies or establishments that are part of a multinational group should review these additional transfer pricing documentation and filing requirements for financial years starting on or after January 1, 2025. The recent updates to the Local File form (Form 275.LF) and the Master File form (Form 275.MF) introduce several changes that require attention.