The fee caps for non-audit services
Non-audit services other than the prohibited non-audit services are, in principle, permitted. However, for most companies, the total fees for permissible non-audit services provided by the audit firm (not its network) cannot exceed a certain cap.
Fee cap assessment
Fee caps that cannot be exceeded:
- A 70% fee cap for public interest entities (“PIEs”);
- A 100% fee cap for entities (other than PIEs) that are part of a group that has to prepare and publish consolidated financial statements (a.k.a the “1 to 1 rule”).
Every time the statutory auditor or audit firm (not the network) plans to provide permissible non-audit services, the assessment of the applicable fee cap has to be made.
The fee cap assessment should be performed over the 3-year audit mandate period, on an accruals basis, by comparing the audit and non-audit fees paid by the Belgian audited entity as well as its parents and subsidiaries to the statutory auditor or audit firm (not the network). All non-audit services performed by the auditor or audit firm, save for non-audit services required by law, need to be taken into account for both fee caps.
Furthermore, for purposes of calculating the 100% fee cap, fees for acquisition due diligence services are disregarded.
Exceptions to the 100% fee cap
While there are no exceptions to the 70% fee cap, there exist three exceptions to the 100% fee cap:
- In the case that the audit is performed jointly with another statutory auditor (i.e. from a different network). This exception only applies to entities which are not obliged by law to establish an audit committee;
- When the formally established audit committee of the Belgian audited entity or its parent (established in Belgium, the EEA or another country which is member of the OECD), pre-approves a derogation to the 100% fee cap.
If the statutory auditor obtains a pre-approval (for a maximum of 2 years) to derogate from the 100% fee cap from the oversight body for statutory auditors (CTBR/CSRE).