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Corporate Tax Alerts

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Royal Decree regarding the interest limitation rule published

15 January 2020

On 27 December 2019, the Royal Decree (“RD”) of 20 December 2019 addressing the interest limitation rule (Dutch | French) was published in the Belgian Official Journal. The RD introduces several changes to the interest limitation rule (cf. Article 198/1 of the Belgian Income Tax Code (“ITC”); also known as “30% EBITDA rule”). The RD’s provisions are applicable as of tax year 2020, i.e. financial years that began on or after 1 January 2019.

Belgian Finance Minister: DRD applicable on Swiss dividends regardless of Swiss tax reform

14 January 2020

In a 14 November 2019 reply to a 24 October 2019 parliamentary question, which was published in the latest Bulletin (Dutch | French), the Finance Minister confirmed that Swiss dividends are not caught by the first exclusion ground, and continue to benefit from the 100% dividend received deduction (“DRD”), regardless of the recent Swiss corporate tax reform.

CJEU rules Belgian participation exemption applied with NID infringes EU directive

20 December 2019

The Court of Justice of the European Union (CJEU) issued its decision on 19 December 2019 in a case (C-389/18) referred by the Brussels Tribunal of First Instance, concluding that the application of Belgium’s dividends received deduction (DRD) in conjunction with the notional interest deduction (NID), infringed the EU parent-subsidiary directive (PSD). The CJEU effectively followed the opinion (French) issued by Advocate General (AG) Saugmandsgaard Øe on 5 September 2019.

OECD releases additional implementation guidance on CbC reporting

19 November 2019

The OECD on 5 November released additional guidance on the implementation of the country-by-country (CbC) reporting requirement, which was first introduced in the BEPS Action 13 final report. The new guidance expands on the implementation guidance already issued by the OECD, most recently in September 2018.

OECD proposes “unified approach” to Pillar 1 of project to address tax challenges from digitalisation of the economy

11 October 2019

The OECD on October 9 released a public consultation document on the Secretariat’s proposal for a “unified approach” under Pillar 1 of the Inclusive Framework’s project to address international taxation in the digitalised economy. Pillar 1 focuses on revising the allocation of taxing rights among countries, potentially including new approaches to nexus (permanent establishment) issues and the arm’s length principle.

Stakeholders are invited to provide comments on the document by Nov. 12. A public consultation will take place in Paris on Nov. 21-22.

The document attempts to narrow the field of options, drawing largely on aspects of the modified residual profit split (MRPS) method and the distribution-based approaches laid out in the Programme of Work to Develop a Consensus Solution to the Tax Challenges Arising from the Digitalisation of the Economy issued in May 2019, and less so on the fractional apportionment method. The document lays out a three-tier profit allocation mechanism as the foundation of Pillar 1.

Belgian Supreme Courts upholds tax-on-tax

11 October 2019

On 19 September 2019, the Belgian Supreme Court issued a judgment in a dispute where a Belgian REIT (“SICAFI” / “vastgoedbevak”; now “SIR” / “GVV”) challenged the inclusion of corporate tax paid in its taxable basis, resulting into the so-called ‘tax-on-tax’. The Belgian Supreme Court ruled in favour of the Belgian tax authorities and upheld this tax-on-tax practice. This judgment is also relevant for S-REIFs (“FIIS” / “GVBF”) and other regulated investment vehicles that have the same taxable basis as a Belgian REIT.

Corporate tax return due date for tax year 2019 extended

10 October 2019

The Belgian tax authorities have granted an additional extension until Monday 14 October 2019 midnight for both the resident and non-resident corporate income tax returns for tax year 2019.

New deadline for submission of rulings impacting the 2020 corporate tax return

27 September 2019

The Belgian Ruling Commission published a newsflash (Dutch | French) on its website with respect to (pre-)filing requests in the field of Transfer Pricing, Patent Income Deduction, and Innovation Income Deduction.

Corporate tax return due date for tax year 2019 extended

18 September 2019

Following our alert of 4 May 2019, the Belgian tax authorities have granted an additional extension to 10 October 2019 for both the resident and the non-resident corporate income tax returns for tax year 2019 which were initially due by 26 September 2019.

Multilateral Convention status tracker now available

8 August 2019

The Multilateral Convention to implement Tax Treaty related Measures to prevent Base Erosion and Profit Shifting (Convention or MLI) constitutes a major change to international taxation.

Deloitte recently developed an MLI implementation status tracker, which is readily available for download on the Deloitte website

Belgian Ministry of Finance publishes guidance on CbC reporting correction procedures

6 August 2019

On 30 July 2019, the Federal Public Service for Finance (FPS Finance) published guidance on country-by-country (CbC) reporting correction procedures.

For each reporting period, CbC reporting requires Belgian entities to provide the (FPS Finance) with the CbC Report for the multinational enterprise that they are part of, either as ultimate parent entity, surrogate parent entity or as constituent entity subject to Local Filing rules. These CbC Reports are subsequently exchanged by the FPS Finance with the Competent Authorities in all the relevant partners’ jurisdictions.

The exchanged information’s accuracy must be ensured by all involved in the reporting.

Belgium deposits instrument of ratification for Multilateral Instrument (MLI) implementation

9 July 2019

On 26 June 2019, Belgium deposited the ratification instrument enacting the Multilateral Convention to Implement Tax Treaty Related Measures to Prevent BEPS (“MLI”).

The MLI is a product of the OECD’s BEPS project and introduces changes to bilateral tax treaties worldwide through a multilateral instrument. The MLI aims to tackle tax treaty abuse, improve dispute resolution, prevent the artificial avoidance of permanent establishment status and neutralise the effects of hybrid mismatch arrangements.

Tax authorities publish communication on second corporate tax prepayment due 10 July 2019

5 July 2019

The tax authorities published a communication (Dutch | French) regarding the second corporate tax prepayment (i.e. 10 July 2019 for financial years ending on 31 December 2019). It should be noted that the payment should arrive in the tax authorities’ account number by 10 July 2019 at the latest.

Tax year 2019 corporate tax return form and anti-abuse measures circular published

27 June 2019

The Belgian tax authorities have published the corporate income tax return form for tax year 2019 in the Belgian Official Journal of 14 June 2019 (Dutch | French).

OECD releases program to develop consensus solution to tax challenges arising from digital economy

6 June 2019

The Organisation for Economic Co-operation and Development (OECD), now working as the expanded OECD/G20 Inclusive Framework on Base Erosion and Profit Shifting (BEPS), released on May 31 a program of work that, if it reaches fruition and is implemented by member nations, would fundamentally alter the longstanding rules that govern the international taxation of all large multinational entities (MNEs), not just those that might consider themselves “digital companies.”

The program of work calls for “a solution to be delivered in 2020,” a time frame the 129-member Inclusive Framework acknowledges is “extremely ambitious,” and would require “the outlines of the architecture” to be agreed to by January 2020.

New Belgian law to reduce transfer pricing reporting compliance burden

17 May 2019

The law of 2 May 2019 regarding various tax provisions 2019-I was published in the Belgian Official Journal on 15 May 2019. This new law includes a change in Belgian transfer pricing reporting obligations, reducing the compliance burden for Belgian entities obliged to file a Country-by-Country notification form (275 CBC NOT). A new section (§ 3) is added to the Belgian Income Tax Code’s (ITC) article 321/3, which deals with the CbC notification requirement.

Corporate tax return due date for tax year 2019 published

10 May 2019

The Belgian tax authorities have published the due dates for both resident and non-resident corporate income tax returns for tax year 2019.

Important legislative developments for B-REIT and S-REIF sectors

10 May 2019

Although the elections are fast approaching, the Federal Parliament has been very active during the past months, resulting in the adoption of numerous bills. Some of those are of significant importance for B-REITs (“Société Immobiliére Réglementée” (“SIR”) / “Gereglementeerde Vastgoedvennootschap” (“GVV”)) and S-REIFs (“Fonds d’investissement immobilier spécialisé” (“FIIS”) / “Gespecialiseerd Vastgoedbeleggingsfonds” (“GVBF”)).

Belgium tax authorities publish guidance on application of transfer pricing documentation penalty regime

29 March 2019

The Belgian tax authorities published additional guidance on the application of the transfer pricing documentation penalty regime on 8 February 2019. The guidance was published as a circular (2019/C/14) that will be an addendum to an existing circular (2017/C/56) on the Belgian transfer pricing reporting requirements.

General Court annuls EPR state aid decision

15 February 2019

In its decision dated 11 January 2016, the European Commission concluded that the “excess profit ruling” (EPR) regime applied by Belgium since 2005 constituted unlawful and incompatible state aid. Consequently, it ordered Belgium to recover this aid, plus compound interest, from the beneficiaries. Under the EPR regime, Belgian companies were allowed, in certain instances and based on a ruling granted by the Ruling Commission, to exempt the portion of their accounting profits that had to be considered “excessive” (i.e. these excess profits would not have been made by comparable stand-alone companies operating in similar circumstances). 

Belgium brought an appeal against this decision before the General Court on 22 March 2016. Several EPR beneficiaries also brought their case before the General Court, including Magnetrol International on 25 May 2016. Pending the procedure, Belgium recovered the alleged state aid from the beneficiaries on a blocked account.

On 14 February 2019, the General Court delivered its judgment on the appeal by the Belgian State, to which it attached the Magnetrol International appeal, annulling the Commission decision in its entirety.

OECD issues Policy Note on Addressing the Tax Challenges of the Digitalisation of the Economy

1 February 2019

On 29 January 2019 the G20/OECD Inclusive Framework on Base Erosion and Profit Shifting (BEPS) released a short Policy Note to provide an update on their work on Addressing the Tax Challenges of the Digitalisation of the Economy.

The OECD will explore two areas (‘pillars’) in parallel to work towards reaching a new consensus-based long-term solution in 2020:

  • Pillar 1: Allocation of taxing rights between countries, looking at both nexus and profit allocation rules and, in particular, reward for market/user countries.
  • Pillar 2: Addressing remaining BEPS issues including the consideration of rules to strengthen countries’ ability to tax profits where income is subject to a low effective rate of tax.

The Policy Note is intended to provide an early update, and makes clear that countries have agreed to look at a range of proposals on a ‘without prejudice’ basis to allow for necessary further work without commitment at this stage to a particular course of action.

Technology enabled advisory during 2019 transfer pricing audits

28 January 2019

The 2019 TP audit wave is well underway and as expected, the standard TP questionnaire is similar to last year’s edition (transfer pricing alert of 18 January 2018).

While the Belgian Tax Authorities’ approach remains the same, namely through the standard TP audit questionnaire, Deloitte introduces TP Assistance 2.0 as a new and innovative technology enabled solution to advise companies during TP audit investigations.

Brexit Readiness Update: the latest developments and more

16 January 2019

Political developments - Impact for global trade - EU Commission preparing Brexit Contingency Plan - Belgium preparing a Brexit emergency law - Market/industry developments - Helping you prepare for a “no-deal” Brexit - Brexit webinars

Global Research Bulletin: Trends in Transfer Pricing

19 December 2018

Deloitte recently commissioned an extensive, global and independent research study to better understand emerging Transfer Pricing market trends. This alert aims to share the research findings.

Brexit Readiness Update: the latest developments and more

14 December 2018

CJEU confirms that the UK can unilaterally revoke Article 50 - Political developments - Growing importance of preparing for a “No-deal” Brexit - Upcoming Brexit webinars

Transfer pricing documentation deadline extended

7 December 2018

The Belgian tax authorities have recently announced a delay in deadlines for the filing of the Master and Local File forms as well as CbC Notifications, initially due by 31 December 2018.

UBO register: information reporting deadline and FAQ publication

2 October 2018

The Royal Decree of 30 July 2018 (published on 14 August 2018) defines the implementation modalities for the 'register of ultimate beneficial owners' (the 'UBO register').

The Belgian legislator had already created the legal framework for the UBO register in the Anti-Money Laundering (AML) Law of 18 September 2017, implementing and transposing the Fourth AML Directive. The entities for which information concerning the UBOs must be collected are Belgian incorporated companies (including Belgian civil partnership), entities incorporated in accordance with the Belgian Non-profit Organisations Law (such as non-profit organisations, international non-profit organisations and private foundations), as well as trusts and fiduciaries.

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