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Transfer Pricing Guide - Belgium

Overview of Transfer Pricing in Belgium

Belgium has implemented various transfer pricing rules to ensure that multinational enterprises (MNEs) comply with the arm’s length principle. The Belgian Corporate Income Tax Code (BITC) requires MNEs to prepare a master file, local file, and Country-by-Country Reporting (CbCR) report.

Documentation Threshold

  • Master file: EUR 50 million operating and financial income or EUR 1 billion balance sheet total
  • Local file: same criteria as for the master file
  • CbCR: gross consolidated revenue of at least EUR 750 million

Submission Deadline

  • Master file: within 12 months of the last day of the reporting period of the MNE group
  • Local file: within the deadline for filing the corporate income tax return
  • CbCR: within 12 months of the last day of the reporting period of the MNE group

Penalty Provisions

  • Documentation late filing provision: fines up to EUR 25,000
  • Tax return disclosure late/incomplete/no filing: fines up to EUR 1,250; ad valorem tax increase ranging from 10% to 200%
  • CbCR late/incomplete/no filing: fines up to EUR 25,000

Transfer Pricing Methods

Belgium accepts various transfer pricing methods, including the comparable uncontrolled price (CUP), resale price method (RPM), and profit split method. An external comparability study is recommended.

Advance Pricing Agreement (APA)

  • Unilateral APA: submitted to the Ruling Commission; 4-6 months processing time
  • Bilateral APA: submitted to the International Relations Department; co-ordinated with other relevant jurisdictions; not published; variable processing time

Transfer Pricing Audits

Belgian tax auditors have been increasingly focused on transfer pricing and international transactions. An audit typically begins with a standard transfer pricing questionnaire.

Transfer Pricing Penalties

Administrative fines can be imposed for failure to comply with transfer pricing documentation requirements or in case of transfer pricing adjustments.

Hot Topics and Recent Updates

  • On 20 September 2023, the General Court of the European Union ruled that excess profit tax rulings granted by Belgium to multinational groups were state aid.
  • Beneficiaries may have to refund the advantage they derived from these tax rulings to the Belgian State.