Recently new draft tax law provisions have been filed with the Belgian Parliament (Parl St, Kamer, 2009-2010, nr 52-2278/001) for further discussion.
This draft law includes this provision: As from tax assessment year 2010, for payments made as from 1 January 2010, companies subject to Belgian resident or nonresident corporate income tax, should report all material payments made, directly or indirectly, to persons located in tax havens. Material payments are considered to be payments of €100,000 or more made during a given tax assessment year.
Within the context of this new (draft) provision, tax havens are considered to be
Countries which have been identified by the OECD as not sufficiently cooperative in the international exchange of information; and
Countries which will appear on a list (still to be drafted by the Belgian tax authorities and to be processed under the form of a royal decree) of countries with no or low (less than 10%) taxes.
Payments made, directly or indirectly, to such tax havens and which have not been reported, will not be accepted as deductible business expenses. The same will apply for the payments which have been appropriately reported, but for which the taxpayer concerned has not provided sufficient proof that these payments have been made in the context of real and sincere transactions and with persons other than artificial constructions. The latter proof can be provided by all means of proof as defined in the Belgian Income Tax Code.
Furthermore it should be noted that the existing tax on secret commissions (309%) can also be levied on these payments under the conditions of the existing law (article 219 of the Belgium Income Tax Code)
Dirk Van Stappen (dvanstappen@kpmg.com), leader of KPMG's Belgian transfer pricing practice
