Belgium issued regulation to introduce a requirement for a master file and a local file for MNC group resident in Belgium if it satisfies one of the three thresholds like a sum of operational and financial income of €50 million; or a balance sheet total of €1 billion; or an annual average of employees of 100 full-time employees. The master file requirement is effective from fiscal year 2017. Master file will contain information regarding description of the group’s capital structure, transfer pricing policy and significant intangible assets utilized. A master file shall be completed within 12 months after the end of the fiscal year of its ultimate parent company. The Local file will have to be provided in a specific format consisting of two parts. One part of the Local file form will contain some general information that will have to be completed and filed by all companies or permanent establishments satisfying one of the three thresholds (listed above).
The second part (a more detailed one, providing mainly qualitative and quantitative information on the various sorts of inter-company transactions) of the form will only be completed and filed by companies or permanent establishments that have cross-border intragroup transactions exceeding in total a value of €1 million. In instances when the company or permanent establishment includes more than one business unit, the second part of the form will have to be completed and filed per business unit exceeding the €1 million threshold.
Belgium has introduced Country-by-Country (CbC) reporting requirement in compliant with the OECD and EU provisions for domestic entities with consolidated group revenue of at least €750 million for the preceding fiscal year. The CbC report generally has to be prepared for the fiscal years starting from 1 January 2017.
The Country-by-Country (CbC) report must be submitted by a ultimate parent company resident in Belgium. A parent company is a company that is not a subsidiary of any other company in Belgium. The country by country reporting requirement applies where the consolidated group revenue in the preceding year is at least €750 million.
The report must cover group revenue, distinguishing between related and unrelated parties; accounting results before corporate income tax (or similar taxes); and corporate tax (or similar taxes) paid or accrued, including withholding tax.
The average number of employees in each entity must be reported. The CbC report must be submitted within twelve months after the end of the tax year. Companies and permanent establishments required to satisfy the new rules and that fail to satisfy the reporting and filing requirements will be subject to penalties ranging from €1,250 to €25,000, as from the second infringement.
