• Publication of Belgian Transfer Pricing Circular

Publication of Belgian Transfer Pricing Circular

03 March 2020

On the 25 February 2020, the Belgian tax administration published the final version of the Transfer Pricing Circular Letter (Circular Letter 2020/C/35) in French and Dutch on their official website. The Circular Letter is the final version of the two draft Circular Letters, initially published by the Belgian tax administration on 9 November 2018, and for a second time on 18 June 2019, for public consultation.

Alignment with OECD Transfer Pricing Guidelines for Multinational Enterprises and Tax Administrations

This Circular Letter is broadly aligned with the 2017 version of the OECD Transfer Pricing Guidelines for Multinational Enterprises and Tax Administrations (2017 OECD TPG) but also provides insights on the interpretations and preferences of the Belgian tax administration.

The Circular Letter includes the recent works achieved by the OECD with respect to Transfer Pricing matters following BEPS Actions 8-10 – “Aligning Transfer Pricing outcomes with value creation” and the “Transfer Pricing guidance on financial transactions”, released on February 11, 2020. Concerning the guidance on financial transactions, the Belgian tax administration explicitly mentions that the aim is to indicate some important elements which will be taking into consideration, when confronted to such transactions. More details on the recently released Transfer Pricing guidance on Financial Transactions can be found here.

The majority of the provisions in the Circular Letter will apply retroactively to related-party transactions undertaken on or after 1 January 2018. Only a limited number of provisions will be applicable for related-party transactions undertaken on or after January 2020. For related-party transactions before 1 January 2018, the Belgian tax administration will follow the regulations in force at that period.

The Circular Letter also confirms that the rulings that have been granted by the Service for Advance Decisions before the issuance of the Circular letter are not subject to review in retrospect following the viewpoints stated in this Circular Letter.   

Contact

In case of questions with respect to the Transfer Pricing Circular Letter, please do not hesitate to contact the BDO Transfer Pricing team to assist you in assessing the impact of this Circular Letter on your Transfer Pricing policies: