On June 29, 2016, the Belgian Parliament adopted the ‘programme law’ (introduced on June 2, 2016) that contains the introduction into Belgian tax law specific transfer pricing documentation requirements (published in the Belgian Official Gazette of July 4, 2016). These requirements are based on Action 13 of the Organisation for Economic Co-operation and Development (OECD)/ G20 Base Erosion and Profit Shifting (BEPS) project. Only minor adjustments with no effect on the technical content of the draft programme law were made.
The relevant articles of the programme law introduce a three-tier documentation approach as provided under BEPS Action 13: Master file, local file, and country-by-country reporting (CbCR). According to the newly adopted documentation requirements, Belgian entities of a multinational group that exceed one of the following criteria need to submit to the tax authorities a master file and a local file (the detailed form that is part of the local file only when at least one of the business units of the entity has realised intra-group cross-border transactions of more than one million euros [EUR]):
- operational and financial revenue of at least EUR 50 million, excluding non-recurring revenue
- balance sheet total of EUR 1 billion, or
- annual average number of employees of 100 full-time equivalents.
Belgian ultimate parent entities of a multinational group with a gross consolidated group revenue of at least EUR 750 million should file a CbCR. Under certain conditions, the Belgian entity that is not the ultimate parent entity of the multinational group may be required to file the CbCR directly with the Belgian tax authorities.
The master file and CbCR should be filed no later than 12 months after the last day of the reporting period concerned of the multinational group. The local file, however, should be filed with the tax return concerned.
The programme law also introduces specific transfer pricing documentation penalties, ranging from EUR 1,250 to 25,000.
Currently, the Royal Decrees covering the implementation measures of the newly adopted documentation requirements are being drafted. It is expected that these implementation measures will be finalised by the end of September or early October 2016.