TRANSFER PRICING AS NEW WEAPON TO BALANCE BUDGET
22 May 2013
We noted a significant increase in the transfer pricing audit activity in Belgium since the beginning of this year. The transfer pricing audit cell sent approximately 200 lengthy transfer pricing questionnaires to multinationals but also to small and medium sized companies and branches operating in Belgium. The transfer pricing audit cell does not have any specific industry or transactions on its radar screen so all industries and transactions types are targeted. Moreover, the Belgian tax authorities enlarged their transfer pricing teams by involving regional tax inspectors that received trainings on transfer pricing over the last couple of months.
The questionnaires are lengthy and time consuming to answer unless you prepared transfer pricing documentation describing your company’s business, intercompany transactions, functions, risks and assets as well as an economic analysis demonstrating the arm’s length nature of the transfer pricing policies you apply. In principle the answers to these questionnaires need to be provided within 30 days to the Belgian tax authorities.
This increased audit activity in Belgium ties in to the increased enforcement activities worldwide which have made transfer pricing a key risk management issue for many companies. Pro-actively reviewing and documenting your transfer pricing policies has as such become an absolute minimum to avoid difficult and time consuming discussions with tax authorities.
The BDO transfer pricing team can help you in dealing with these questionnaires and assisting you with the subsequent transfer pricing audit. We use a tested approach and have a good working relationship with the transfer pricing audit cell.