Corporate Tax Alerts
News you can count on
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.
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.
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.
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
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.
Draft Repair Law amending the Corporate Tax Reform Law: Relevance for the Belgian Real Estate Industry?
20 June 2018
During the parliamentary discussions of the Corporate Tax Reform Law of 25 December 2017 (“Corporate Tax Reform Law”), the Minister of Finance announced that a new legislative act would be drafted in order to supplement and adjust the corporate tax reform. On 11 June 2018, the federal government submitted a draft Law on Various Income Tax Provisions (the “Repair Law”) at the Chamber of Representatives (Dutch | French). The government is aiming for a parliamentary vote on the final Law before the summer break.
Several of the measures included in the Repair Law are particularly relevant for the Belgian Real Estate sector. This newsletter will highlight some of the most relevant measures. This text should be read with sufficient prudence as some measures may still change during the parliamentary approval process.
Draft corporate tax reform repair law filed with Parliament
19 June 2018
You will recall that a major reform of Belgium’s corporate tax regime was enacted by the law of 25 December 2017. This reform becomes effective in three phases (tax years 2019, 2020 and 2021, starting on or after 1 January 2018, 2019 and 2020 respectively).
On Thursday 14 June 2018, a draft repair law, filed on 11 June 2018 with the House of Representatives, became available on the House’s website (Dutch | French). This tax alert provides a brief summary of the main repair measures, grouped per phase.
Belgian Tax Authorities publish FAQ on TP documentation requirements
9 May 2018
The Belgian Tax Authorities recently published a list of Frequently Asked Questions (FAQ) on the transfer pricing documentation requirements. The FAQ is available in Dutch and French on the Belgian Tax Authorities’ website.
BEPS: Belgium to change its position on commissionaire arrangements
4 May 2018
To prevent the circumvention of the existing permanent establishment (PE) definition, the OECD recommended important changes to said definition in its BEPS Action 7 Report. In that context, the definition of ‘Agency PE’ in Article 5, §5 of the OECD Model Tax Convention has been revised to tackle so-called ‘commissionaire arrangements’ and similar strategies aimed at avoiding a PE.
European Commission issues draft Directives on the taxation of the digital economy
26 March 2018
On 21 March 2018, the European Commission issued two draft Directives on the taxation of the digital economy. Under the proposed new comprehensive solution, companies would have to pay corporate income tax in each Member State where they have a significant digital presence. In the interim, the Commission proposes a 3% revenue-based Digital Services Tax on specific digital services where the main value is created through user participation.
Global Tax Reset: Updated Transfer Pricing Documentation Summary
8 March 2018
Prepared by Deloitte’s Global Transfer Pricing practice, the “Global Tax Reset - Transfer Pricing Documentation Summary” compiles essential country-by-country (CbC) reporting and documentation information (including master file and local file information when applicable) for 66 jurisdictions around the world.
Constitutional Court abolishes fairness tax as of tax year 2019
2 March 2018
On 1 March 2018, the Constitutional Court rendered its long-awaited decision on the fairness tax.
The fairness tax, effective from tax year 2014, is a separate tax imposed at a 5.15% rate on dividend distributions by non-SME companies, to the extent that they offset taxable income, in the year of distribution, with current year notional interest deduction and/or tax losses carried forward. The tax applies to both resident companies and permanent establishments (PEs) of non-resident companies.
In January 2014, an annulment action was filed before the Constitutional Court on grounds of the fairness tax’s incompatibility with the Constitution, the Treaty on the Functioning of the EU, the Parent-Subsidiary Directive (PSD) and Belgium’s tax treaties.
Are you prepared for upcoming Transfer Pricing filings?
22 February 2018
The due date to submit the CbC notification (assessment year 2018) is fast approaching.
The due date to submit the CbC Report and the Master File Form, both related to assessment year 2017, depends on the financial year-end of the group. For most Belgian entities, the due date coincides with 31 March 2018.