A draft law that would introduce country-by-country reporting and formal transfer pricing documentation requirements at present is in the process of being finalized in Belgium.

Cbc reporting

Belgium has proposed draft legislation to introduce the country-by-country reporting rules pursuant to the OECD & EU documentation provisions. It would be effective from assessment year 2017. 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, Local file

Belgium is considering introducing requirements for filing a “Master file” and a “Local file” for each Belgian company or permanent establishment (of a multinational group) that satisfies one of the following thresholds:

• A sum of financial and operational income of €50 million
• A total of balance sheet €1 billion
• An annual average of employees of 100 full-time employees.

Master file: Belgium has proposed 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: Belgium has proposed draft legislation to introduce local file requirement as per the recommendations of the OECD’s base erosion and profit shifting (BEPS) Action 13. The Local file would have to be provided in a format consisting of two parts.

• The first part of the Local file form would contain some general information that would have to be filed by all companies or PEs satisfying one of the three thresholds (listed above).
• The second part of the form would only be filed by companies or PEs that have cross-border intra-group transactions exceeding in total a amount of €1 million.

The draft law foresees that the Local file would need to be filed electronically along with the Belgian income tax return.

Penalties, effective date

Companies and permanent establishments required to satisfy the new rules and fail to satisfy the reporting and filing requirements would be subject to penalties ranging from €1,250 to €25,000. The TP documentation requirements would be introduced as from assessment year 2017.