Belgian Government Cracks Down on Tax Evasion: New Rules for Reporting Payments to Tax Havens

Brussels, December 31, 2023: Reinforcing Reporting Requirements for Corporate Payments to Tax Havens

The Belgian legislature passed a new law on December 31, 2023, fortifying the reporting requirement for corporate payments made to jurisdictions considered tax havens. The legislation is a response to a reported loophole allowing some companies to evade tax obligations.

Context

Effective January 1, 2024: Non-resident corporate taxpayers are now required to report payments above EUR 100,000 (paid and unpaid) during a taxable period to jurisdictions:

Not adhering to the OECD’s Global Forum Standard of Transparency and Exchange of Information for Tax Purposes.
On Belgium’s list of jurisdictions with no or low-income taxation.
On the European Union’s list of non-cooperative jurisdictions.

*Before this update: Companies were required to report payments only when the total payments during the taxable period exceeded EUR 100,000. This allowed some entities to intentionally split their payments to tax havens and stay below the threshold, obscuring transactions and potential tax-deductibility for unreported payments._

Strengthening Transparency: Reporting Significant Transactions

The Belgian government has expanded and increased the reporting regime’s scope in an effort to eliminate such practices. As per the amended law, non-resident corporate taxpayers must report significant transactions as soon as both paid and unpaid amounts during the taxable period exceed EUR 100,000.

Combating Tax Evasion: Boosting Transparency for Business Transactions

The Belgian government’s focus remains clear: combating tax evasion is a priority. This updated rule will enable the tax administration to identify and review transactions with tax havens more effectively, and prevent businesses from profiting from undeclared payments.

Should you have any questions or require further clarification, please contact [Your Designated Tax Advisor from Fieldfisher Belgium].

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