At the initiative of the G20, the OECD was instructed to develop an action plan which should lead to a common approach to combating the phenomenon of Base Erosion and Profit Shifting (BEPS). One of the main principles of this action is plan is the ‘international transparency’. To meet this requirement, Action 13 of the action plan (also known as BEPS 13) introduced a number of new rules concerning transfer pricing documentation and introduces country-by-country reporting. The exchange of information is a priority in this respect.

Belgium follows a three-tiered approach to meet the documentation requirements in BEPS 13. In general, the preparation and submission of a “Master file” (i.e. Form 275-MF) and a “Local file” (i.e. Form 275-LF) is required for every Belgian Company or permanent establishment (of a multinational group) that exceeds at least one of the following thresholds (to be assessed on the basis of the stand-alone statutory financial statements of the company concerned for the preceding financial year -> so assessment of documentation requirements for FY 2020 to be assessed on the basis of the financial statements of FY 2019):

  • Combined operational and financial income of €50 million (excluding non-recurring income);
  • A balance sheet total of €1 billion;
  • An annual average number of 100 FTE.

In case the group exceeds the threshold of a consolidated gross turnover of 750 mio EUR in 2019, the Group will have to file a Country-by-Country (CbC) report for FY 2020. In case the Belgian entity is not the entity that files the CbC report (usually this is filed by the Ultimate Parent Entity of the Group), it will have to submit a country-by-country notification form (i.e. Form 275-CBC NOT) for FY 2020 with the Belgian tax authorities to disclose the identity and the residence of the reporting entity. The submission deadline for Form 275-CBC NOT is the last day of the reporting period of the Group.

Form 275-LF Form 275-MF Form 275-CBC NOT CbC Report
Thresholds assessment year FY 2019 FY 2019 FY 2019 FY 2019
Reference period FY 2020 FY 2020 FY 2020 FY 2020
Filing deadline Due date of corporate tax return 12 months after closing date FY 2020 Closing date FY 2020 12 months after closing date FY 2020

This Transfer Pricing documentation tool has been carefelly prepared but does not intend to cover every specific situation. Therefore, based on your company’s situation, the actual applicable requirements might be different from the outcome predicted by the tool.

The information displayed does not constitute a professional advice and as such should not be relied upon without a proper professional advice. Therefore, BDO shall refuse any liability for issues or losses arising from the use of the tool. The terms of use of BDO’s website are fully applicable.

Please do not hesitate to contact our experimented professionals who will be happy to help you comply with the Belgian Transfer Pricing legal framework.

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