• Law on transfer pricing documentation requirements in Belgium now published

Law on transfer pricing documentation requirements in Belgium now published

06 July 2016

The Program law of 1 July 2016 (Belgian Official Journal 4 July 2016) adopts the announced transfer pricing documentation requirements. The reporting requirements take effect from assessment year 2017. A preview of what multinationals will be facing.

BEPS action point 13

In the context of the OECD initiative to tackle Base Erosion and Profit Shifting (‘BEPS’), Action 13 focuses on increasing transparency through the provision of adequate information in a consistent manner for the performance of (transfer pricing) risk assessments. In this respect, the OECD has introduced a three-tiered approach to transfer pricing documentation which requires multinational enterprises to compile (1) a Country-by-Country report (‘CbCr’); (2) a Master file; and (3) a Local file.

As many other countries, Belgium has also developed new measures to implement BEPS Action 13 into Belgian law (Programme law of 1 July  2016).

Country-by-country reporting

Under the Programme Act, Belgium introduces Countr-by-Country reporting (CbCr) requirements that are compliant with the OECD and EU provisions.

The CbCr is a report containing aggregate information related to the amount of revenue, profit (loss) before income tax, income tax paid, income tax accrued, stated capital, accumulated earnings, number of employees, and tangibles other than cash equivalents with regard to each jurisdiction in which the MNE operates. The target groups for this legislation are MNEs with a consolidated gross turnover exceeding EUR 750 million, who will have to file the CbCr with the Belgian tax authorities within 12 months after the closing of the consolidated financial statements of the group. 

Master file, Local file

Belgium also introduces requirements for submitting a "Master file" and a "Local file" for each Belgian company or permanent establishment (of an MNE) that satisfies one of the following thresholds (to be assessed on the basis of the stand-alone financial statements of the Belgian entity - company or permanent establishment - concerned for the preceding financial year):

  • Combined operating and financial income (excl. non-recurring income) of EUR 50 million
  • A total balance sheet of EUR 1 billion
  • Annual average number of 100 FTE.


The Master file focuses on qualitative data and contains an overview of the MNE, in particular:

  • the nature of the business activities
  • a description of value creation of the group entities
  • the intangibles
  • the intra group financial transactions
  • the general transfer pricing policy
  • the consolidated financial and fiscal position of the MNE
  • the worldwide allocation of revenue and economic activity
  • the business restructurings
  • a list of unilateral APAs and rulings on the allocation of income.

The Master file will have to be filed with the Belgian tax authorities within a period of 12 months after the closing of the reporting period of the group. The filing format practicalities will be further described in a to-be-issued Royal Decree.

Local file

The Local file (XML document) focuses on quantitative data and consists of two parts:

  1. general part containing information on the local entity, including the management and organisational structure, the business activities, competitors, ... .
  2. a detailed part containing  a transfer pricing analysis of the transactions between the local entity and the foreign entities of the the MNE (relevant financial information of these transactions, a comparability study, and the selection and application of the most adequate transfer pricing method). The detailed part only needs to be completed if at least one of the business units of of the Belgian group entity exceeds the threshold of intragroup transactions in a total value of 1 million EUR in the previous closed financial year (for each business unit exceeding the threshold)

The Local file is to be filed electronically together with the Belgian income tax return. It deviates somewhat from the model  hat is put forward by the OECD. The XML file mainly contains numerical information. An overview of the industry, detailed information on the company and its products and a functional analysis is not requested in the local file. This means that is it is recommended to draw up a Local file in line with the OECD instructions together with the XML form.

In brief, it can be concluded that the requested information does not deviate substantially from the information that already needs to be provided to the Belgian tax authorities in case of a transfer pricing audit. The format is, however, more consistent and allows tax authorities selecting transfer pricing files more efficiently and collecting information in a more consistent manner.


Reports may be drafted in English. In case of an audit however, a translation of the reports in one of the official languages may be requested. 


Companies and permanent establishments required to satisfy the new rules and that fail to satisfy the reporting and filing requirements will be subject to an administrative fine, ranging from 1,250 EUR to 25,000 EUR. 

Effective date

The reporting requirements become effective for reporting MNE Groups’ from assessment year 2017, i.e. fiscal years beginning on or after 1 January 2016.

Final conclusions

There are currently a lot of questions regarding the confidentiality of the country-by-country report as to the information that is or is not made public.

The Master file seems to focus on qualitative data, whereas the Local file rather focuses on quantitative data.

Companies that are not targeted by the new formal transfer pricing reporting requirements are still recommended to document the applied transfer pricing policy, as they can also still be submitted to a transfer pricing audit. In addition, it may be of interest to investigate the thresholds that other countries apply for their transfer pricing documentation requirements. It could be that Belgian entities of an MNE are not required to provide transfer pricing documentation based on their stand alone annual accounts, but that, for instance, a Dutch subsidiary would need to provide transfer pricing documentation based on the Dutch threshold, including information on the Belgian parent company (transfer pricing requirements in the Netherlands apply to MNEs with a worldwide consolidated turnover of at least EUR 50 M).


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