Belgium’s Parliament has adopted the changes to the Pillar Two global Minimum Tax Rules approved for multinational enterprises and large-scale domestic groups in December, 2023. The amendments will be enforced for fiscal years beginning from 31 December, 2023.
The amendments include the following provisions:
Compliance
- Establish a legal basis for registering in-scope groups in the Belgian commercial register. This is necessary to obtain a unique registration number to meet Belgian compliance requirements.
- Implementing a requirement to submit an additional form detailing the income inclusion rule (IIR) and the undertaxed payment rule (UTPR).
GloBE computation
- Change the definition of qualified refundable tax credit to include the concept of marketable transferable tax credits.
- Implement the election allowing the inclusion of all dividends from portfolio shareholdings (<10%) in GloBE income and loss.
- Establish a limitation on the deductibility of domestic minimum top-up tax (DMTT) from the jurisdictional top-up tax.
- Specify that the rule excluding deferred taxes related to tax credits is not applicable in the case when substituting loss carry-forward deferred tax assets.
- Amend the definition of adjusted covered domestic taxes.
- Enact a transitional rule for blended controlled foreign corporation (CFC) systems, such as GILTI (Global Intangible Low-Taxed Income).
Safe harbours
- Establish a permanent safe harbour for the qualified domestic minimum top-up tax (QDMTT) and non-material constituent entities.
- Implement the transitional UTPR safe harbour and integrate the hybrid arbitrage rules within the transitional country-by-country (CbC) reporting safe harbours.
Corrections
- Amend the charging provisions related to Partially Owned Parent Entities (POPEs).
- Revise the definition of the transition year and the rule excluding international activity in the initial phase to ensure compatibility with global standards.
