Times get tough for Belgian taxpayers

International Tax Review is part of Legal Benchmarking Limited, 1-2 Paris Garden, London, SE1 8ND

Copyright © Legal Benchmarking Limited and its affiliated companies 2025

Accessibility | Terms of Use | Privacy Policy | Modern Slavery Statement

Times get tough for Belgian taxpayers

New reporting obligations in financial accounts for intercompany transactions and off-balance arrangements and the increasing use by the tax authorities of disclosures in FIN 48 reports to select taxpayers for transfer pricing audits, have complicated companies’ tax affairs in Belgium

New reporting obligations

A Royal Decree dated August 10 2009 (published in the Belgian Official Gazette of August 24 2009) instructs corporations in Belgium to report all material non-arm’s length intercompany transactions in their annual accounts. No further guidance is provided on what results in a transaction being material.

Extensive reporting obligations apply to corporations listed on a stock exchange or traded on a multilateral trading facility and those that meet more than one of the criteria for being considered a large group (as defined in the Belgian Companies Code). These corporations should report this information about the qualifying transactions:

· the amounts involved in the transactions;

· the nature of the relationship with the related parties; and

· any other information that is needed to obtain an accurate view on the financial situation of the corporation.

The other corporations only have to report direct and indirect transactions between the corporation and its major shareholders and its leadership (for example, the members of the board of directors).

The nature and the business purpose of material off-balance sheet arrangements of which the risks and benefits may influence (the assessment of) the financial situation of a corporation will also have to be reported in the financial accounts. In addition, the corporations subject to the extensive reporting obligations for intercompany transactions will have to quantify the financial impact of the off-balance sheet arrangements on their financial situation.

These new reporting obligations, both for the intercompany transactions and for the off-balance sheet arrangements, apply to financial years starting on or after September 1 2008.

Documenting the arm’s-length character of intercompany transactions and the nature and business purpose of off-balance sheet arrangements and meeting the related new reporting obligations will be of importance to protect the rights of the corporation’s executives responsible for (and involved in the drafting of) the financial accounts Furthermore, corporations will have to demonstrate towards their Belgian statutory auditor that the corporation was not involved in material non-arm’s-length intercompany transactions and/or in abnormal off-balance sheet arrangements to obtain sign-off on the financial accounts.

Disclosures in FIN 48 reports

The Belgian tax authorities have revealed that they will start using the disclosures made by groups in FIN 48 reports to select groups present in Belgium for an audit by the special transfer pricing audit department. This unit was set up late 2004 and consists of Belgian tax inspectors specialised in transfer pricing matters.

Multinational groups present in Belgium and having disclosed tax contingencies resulting from transfer pricing matters should prepare themselves for the fact that they will receive an extensive questionnaire from the special transfer pricing audit department on their transfer prices.

Having filed the answers to the questions raised in this questionnaire, the corporations will be subjected to several visits from the special transfer pricing audit department and will have to make a significant investment to avoid transfer pricing adjustments.

Dirk Van Stappen (dvanstappen@kpmg.com)



more across site & shared bottom lb ros

More from across our site

FTI Consulting’s EMEA head of employment tax and reward tells ITR about celebrating diversity in the profession, his love of musicals, and what makes tax cool
Canadian Prime Minister Mark Carney and US President Donald Trump have agreed that the countries will look to conclude a deal by July 21, 2025
The firm’s lack of transparency regarding its tax leaks scandal should see the ban extended beyond June 30, senators Deborah O’Neill and Barbara Pocock tell ITR
Despite posing significant administrative hurdles, digital services taxes remain ‘the best way forward’ for emerging economies, says Neil Kelley, COO of Ascoria
A ‘joint understanding’ among G7 countries that ‘defends American interests’ is set to be announced, Scott Bessent claimed
The ‘big four’ firm’s inaugural annual report unveiled a sharp drop in profits for 2024; in other news, Baker McKenzie and Perkins Coie expanded their US tax benches
Representatives from the two countries focused on TP as they met this week to evaluate progress under a previously signed agreement – it is understood
The UK accountancy firm’s transfer pricing lead tells ITR about his expat lifestyle, taking risks, and what makes tax cool
Dolphin Drilling intends to discuss the final liability amount and manner of settlement with HM Revenue and Customs
Winning the case against the 20% VAT imposition was always going to be an uphill challenge for the claimants, UK tax advisers argue
Gift this article