- Updated
- July 2025
- Sections
- 15
- Questions
- 47
Key Facts
Core Framework
Art. 185, §2, BITC 92 – explicit reference to the ALP Art. 26, 54, 79 and 206/3 BITC 92 – implicit reference to the ALP – use of the term “abnormal or benevolent” advantages Art. 344 BITC 92 – implicit reference to the ALP – use of the term “legitimate need of a financial or economic nature”
Parliamentary memorandum accompanying the Law of June 21st 2004 introducing art. 185, § 2 BITC Circular Letter n° AFZ/98-003 of 28 June 1999 Circular Letter n° 2020/C/35 of 25 February 2020
The OECD Transfer Pricing Guidelines can be used as a source of interpretation for the application of the aforementioned articles. With regards to the ambulatory application of the OECD Transfer Pricing Guidelines, newer versions of the OECD Transfer Pricing Guidelines can be used with respect to transactions that occur prior to its publication, insofar that they provide clarifications of earlier versions. When the new versions contain aspects/concepts that are considered novel, they can only applied to transactions that occur after the date of publication of the new version. There is no overview of what is considered as a clarification, or as a novelty in newer versions.
§§ 69 – 126 of the Circular Letter n° 2020/C/35 of 25 February 2020
Chapter III of Circular letter n° 2020/C/35 of 25 February 2020 describes the guidance of Chapter III of the OECD TPG.
§§ 123 – 126 of the Circular Letter n° 2020/C/35 of 25 February 2020
The Belgian administration follows the guidance of the OECD TPG and allows for the use of an arm’s length range. Only in exceptional circumstances (when all comparables have a very high degree of comparability), the use of the full range will be accepted. If those exceptional circumstances are not met, the Belgian administration will require the use of the interquartile range. When the transfer price falls outside the (interquartile) range that has been accepted, the Belgian administration will generally correct towards the median of the accepted (interquartile) range.
Documentation
Art. 445bis, §3 BITC 92
Specific penalties from 1.250 EUR to 25.000 EUR apply in case of non-filing, incorrect or incomplete filing.
TP Methods
- CUP
- Resale Price
- Cost Plus
- TNMM
- Profit Split
- Other
Selection: Most appropriate method
Dispute Resolution
We refer to the Belgian MAP Profile for relevant details concerning rulings, APAs and MAPs. Belgium has a Co-operative Tax Compliance Programme (CTCP). Belgium is a participating administration in the OECD ICAP and the ETACA project.
We refer to the Belgian MAP Profile for relevant details concerning rulings, APAs and MAPs. Belgium has a Co-operative Tax Compliance Programme (CTCP). Belgium is a participating administration in the OECD ICAP and the ETACA project.
Simplifications
Belgium implements the simplified and streamlined approach as agreed within the framework of its political commitment at the level of the OECD.
Special Topics
§§ 129 – 163 of the Circular Letter n° 2020/C/35 of 25 February 2020
Chapter VI of Circular letter n° 2020/C/35 of 25 February 2020 summarizes the guidance of Chapter VI of the OECD TPG and where deemed opportune, describes the Belgian position.
§§ 153 – 163 of the Circular Letter n° 2020/C/35 of 25 February 2020
The Circular letter n° 2020/C/35 of 25 February 2020 allows the Belgian tax administration to apply the guidance contained in §§ 6.186 – 6.194 of the OECD TPG.
§§ 164 – 189 of the Circular Letter n° 2020/C/35 of 25 February 2020
Chapter VII of Circular letter n° 2020/C/35 of 25 February 2020 summarizes the guidance of Chapter VII of the OECD TPG and where deemed opportune, describes the Belgian position.
§§ 245 – 267 of the Circular Letter n° 2020/C/35 of 25 February 2020
Chapter X of Circular letter n° 2020/C/35 of 25 February 2020 summarizes the relevant positions of the Belgian tax administration concerning financial transactions.
Full OECD Questionnaire
Legal ReferenceArt. 185, §2, BITC 92 – explicit reference to the ALP Art. 26, 54, 79 and 206/3 BITC 92 – implicit reference to the ALP – use of the term “abnormal or benevolent” advantages Art. 344 BITC 92 – implicit reference to the ALP – use of the term “legitimate need of a financial or economic nature”
Legal ReferenceParliamentary memorandum accompanying the Law of June 21st 2004 introducing art. 185, § 2 BITC Circular Letter n° AFZ/98-003 of 28 June 1999 Circular Letter n° 2020/C/35 of 25 February 2020
The OECD Transfer Pricing Guidelines can be used as a source of interpretation for the application of the aforementioned articles. With regards to the ambulatory application of the OECD Transfer Pricing Guidelines, newer versions of the OECD Transfer Pricing Guidelines can be used with respect to transactions that occur prior to its publication, insofar that they provide clarifications of earlier versions. When the new versions contain aspects/concepts that are considered novel, they can only applied to transactions that occur after the date of publication of the new version. There is no overview of what is considered as a clarification, or as a novelty in newer versions.
Legal ReferenceCommentary to art. 26 BITC 92 Art. 10, 11 and 13 of the Belgian Code of Companies
A party is related with another party through direct or indirect control.
Legal Reference§ 29 of the Circular Letter n° 2020/C/35 of 25 February 2020
Circular letter n° 2020/C/35 of 25 February 2020 stipulates that the MNE group is free to apply any of the methods mentioned within the OECD Transfer Pricing Guidelines and may also apply any other method not mentioned within the OECD if that leads to a more appropriate transfer price.
- CUP (provided)
- Resale Price (provided)
- Cost Plus (provided)
- TNMM (provided)
- Profit Split (provided)
- Other (provided)
Legal Reference§ 22 of the Circular Letter n° 2020/C/35 of 25 February 2020
Circular letter n° 2020/C/35 of 25 February 2020 refers to the most appropriate method.
- Hierarchy of methods (not selected)
- Most appropriate method (selected)
- Other (if so, please explain) (not selected)
Legal Reference§ 34 of the Circular Letter n° 2020/C/35 of 25 February 2020
For controlled transactions involving commodities, the guidance contained in paragraphs 2.18-2.22 of the TPG is followed. Circular letter n° 2020/C/35 of 25 February 2020 mentions the CUP as the potential most appropriate method in the case of transactions of commodities.
Legal Reference§§ 69 – 126 of the Circular Letter n° 2020/C/35 of 25 February 2020
Chapter III of Circular letter n° 2020/C/35 of 25 February 2020 describes the guidance of Chapter III of the OECD TPG.
Legal Reference§§ 123 – 126 of the Circular Letter n° 2020/C/35 of 25 February 2020
The Belgian administration follows the guidance of the OECD TPG and allows for the use of an arm’s length range. Only in exceptional circumstances (when all comparables have a very high degree of comparability), the use of the full range will be accepted. If those exceptional circumstances are not met, the Belgian administration will require the use of the interquartile range. When the transfer price falls outside the (interquartile) range that has been accepted, the Belgian administration will generally correct towards the median of the accepted (interquartile) range.
Legal Reference§§ 118 – 122 of the Circular Letter n° 2020/C/35 of 25 February 2020
Belgium allows for comparability adjustments when these improve comparability.
Legal Reference§§ 129 – 163 of the Circular Letter n° 2020/C/35 of 25 February 2020
Chapter VI of Circular letter n° 2020/C/35 of 25 February 2020 summarizes the guidance of Chapter VI of the OECD TPG and where deemed opportune, describes the Belgian position.
Legal Reference§§ 153 – 163 of the Circular Letter n° 2020/C/35 of 25 February 2020
The Circular letter n° 2020/C/35 of 25 February 2020 allows the Belgian tax administration to apply the guidance contained in §§ 6.186 – 6.194 of the OECD TPG.
Legal Reference§§ 153 – 163 of the Circular Letter n° 2020/C/35 of 25 February 2020
Circular letter n° 2020/C/35 of 25 February 2020 defines a HTVI as an intangible for which (i) no reliable comparables exists, and (ii) at the time of the transaction was entered into, the projections of future cash flows or the assumptions used in valuing the intangible are highly uncertain (cf. § 6.189 OECD TPG). Furthermore, the limitations contained in § 6.193 of the OECD TPG apply.
The statute of limitations for HTVI is the same as for the general transfer pricing audits, namely 6 years (10 years in the case of tax fraud).
Circular letter n° 2020/C/35 of 25 February 2020 describes the HTVI approach. Further, regular trainings are provided for tax auditors in order to avoid the use of hindsight.
Legal Reference§§ 164 – 189 of the Circular Letter n° 2020/C/35 of 25 February 2020
Chapter VII of Circular letter n° 2020/C/35 of 25 February 2020 summarizes the guidance of Chapter VII of the OECD TPG and where deemed opportune, describes the Belgian position.
Legal Reference§§ 182 – 188 of the Circular Letter n° 2020/C/35 of 25 February 2020
Circular letter n° 2020/C/35 of 25 February 2020 allows for the application of the simplified approach for low value-adding intra-group services. The mark-up applied is 5% on relevant costs.
Legal Reference§§ 245 – 267 of the Circular Letter n° 2020/C/35 of 25 February 2020
Chapter X of Circular letter n° 2020/C/35 of 25 February 2020 summarizes the relevant positions of the Belgian tax administration concerning financial transactions.
Legal ReferenceArt. 54 BITC 92 Art. 55 BITC 92 Art. 198, §1, 11° BITC 92 Art. 198/1 BITC 92
Belgium has several rules that limit interest deductions: Non-deductibility of total interests paid to an associated entity which is located in a low-taxed jurisdiction; Non-deductibility of exceeding interests paid that are higher than interest paid under arm’s length conditions; Non-deductibility of exceeding interests paid to an entity located in a low-taxed jurisdiction that has a thin cap ratio of 5:1 or higher; Non-deductibility of the exceeding borrowing costs paid to an associated enterprise that exceed 30% of its EBITDA or 3 million EUR (cf. BEPS Action 4 & EU Directive 2016/1164).
Legal Reference§§ 190 – 211 of the Circular Letter n° 2020/C/35 of 25 February 2020
Chapter VIII of Circular letter n° 2020/C/35 of 25 February 2020 summarizes the guidance of Chapter VIII of the OECD TPG and where deemed opportune, describes the Belgian position.
- Master file consistent with Annex I to Chapter V of the TPG (selected)
- Local file consistent with Annex II to Chapter V of the TPG (selected)
- Country-by-country report consistent with Annex III to Chapter V of the TPG (selected)
- Specific transfer pricing returns (separate or annexed to the tax return) (selected)
- Other (specify): (not selected)
Legal ReferenceArt. 321/1 – 321/7 BITC 92 Circular Letter 2017/C/56 from 4 September 2017 Circular Letter 2019/C/14 from 8 February 2019 BEPS Action 13 website
The Country-by-Country Reporting Framework follows the guidance of the OECD TPG. Reporting entities: The Master File & Local File need to be filed by Belgian group entities that are part of a MNE that has: An operational turnover of more than 50 million EUR; or A balance sheet total of more than 1 billion EUR; or A staff headcount of more than 100 FTE. Timing: The Master File has to be introduced at the latest 12 months after the end of the fiscal year of the MNE group. The Local File has to be introduced together with the annual tax return of the Belgian entity. Accepted languages: All returns may be completed in English, French, Dutch or German. Other elements: The Local File contains an additional return that has to be completed when a relevant business unit has intra-group transactions with a value of more than 1 million EUR.
Legal ReferenceArt. 445bis, §3 BITC 92
Specific penalties from 1.250 EUR to 25.000 EUR apply in case of non-filing, incorrect or incomplete filing.
The Local File contains an additional return that has to be completed when a relevant business unit has intra-group transactions with a value of more than 1 million EUR.
We refer to the Belgian MAP Profile for relevant details concerning rulings, APAs and MAPs. Belgium has a Co-operative Tax Compliance Programme (CTCP). Belgium is a participating administration in the OECD ICAP and the ETACA project.
- Rulings (selected)
- Enhanced engagement or cooperative compliance programmes (selected)
- Advance Pricing Agreements (APA) (selected)
- Unilateral APAs (selected)
- Bilateral APAs (selected)
- Multilateral APAs (selected)
- International Compliance Assurance Programme (ICAP) (selected)
- Mutual Agreement Procedures (selected)
- Other: Belgium is a participating administration in the ETACA project (selected)
Belgium implements the simplified and streamlined approach as agreed within the framework of its political commitment at the level of the OECD.
- N/A (selected)
- N/A (selected)
- N/A (selected)
Legal ReferenceArt. 185, § 2, b) and art. 376, § 1 BITC 92
Yes. Year-end adjustments are allowed.
Article 7 as it read before 2010: 91 treaties. Article 7 as it reads after 2010: 3 treaties. Currently, the Kingdom of Belgium as signed several new Agreements that are not yet into force. They contain: Article 7 as it read before 2010: 6; Article 7 as it read after 2010: 2 (replacing treaties that contain an old art. 7).
- Article 7 as it read before 2010. (selected)
- Article 7 as it reads after 2010. (selected)
Belgium has concluded a Competent Authority Agreement with the USA whereby both parties commit on the implementation of art. 7 in line with the 2010 AOA. Competent Authorities can agree to apply the 2010 AOA to individual files.
Legal Reference§§ 268 – 286 of the Circular Letter n° 2020/C/35 of 25 February 2020
Chapter XI of Circular letter n° 2020/C/35 of 25 February 2020 summarizes the guidance of AOA (both 2008 & 2010) and where deemed opportune, describes the Belgian position.
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