The Government of Belgium has approved new draft legislation to effectively implement CbC reporting and introduce formal transfer pricing documentation requirements in Belgium. The draft legislation is according to 3 tiered approach of Action 13 of OECD Base Erosion and Profit Shifting (BEPS) project. If the Belgian Parliament approves this legislation, qualifying Belgian companies and establishments will have to comply with these new requirements for financial years starting on or after first January 2016.

CbC reporting

The Belgium Government has approved new draft legislation to introduce the country-by-country reporting rules pursuant to the OECD & EU documentation provisions. If the Belgian Parliament approves this legislation, qualifying Belgian companies and establishments will have to comply with these new requirements for financial years starting on or after 1 January 2016. Qualifying groups with a consolidated gross turnover exceeding €750 million would have to file the CbC report with the Belgian tax authorities within 12 months after the closing of the consolidated financial statements of the group.

Master file

The Belgium Government has approved new draft legislation to implement the Master File in line with the new OECD & UN standard. All entities belonging to a MNE group that are tax resident in Belgium would have to prepare a Master file. The Master File would provide comprehensive information of the MNE group. The Master file would have to be filed with the Belgian tax authorities within a period of 12 months after the close of the reporting period of the group.

Local file

The Belgium Government has approved new draft legislation to introduce local file requirement as per the recommendations of the OECD’s base erosion and profit shifting (BEPS) Action 13. A local file will contain specific transfer pricing information for each relevant country of operation.

Other considerations

Failure to submit the CbCR form, Master File or Local File will result in an administrative penalty ranging from €1,250 to €25,000. This penalty will apply as of the second infringement.