Reporting of payments to tax haven | KPMG | BE

Reporting of payments to tax haven – Update of the list of the OECD

Reporting of payments to tax haven

The Global Forum on Tax Transparency and Exchange of Information for Tax Purposes published the new peer review reports for 17 countries or jurisdictions.

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The result of these reviews is that different countries are considered to be non-compliant with the standards on exchange of information:

  • Marshall Islands and Panama received a non-compliant rating.
  • Guatemala, Federated States of Micronesia, Trinidad and Tobago are also considered as non-compliant on an exceptional basis because they cannot move to phase 2 review as elements critical to ensuring effective exchange of information remained not in place for more than 2 years after their phase 1 review. 
  • Kazakhstan is a special case and didn’t receive a final rating. The country has until 30 November 2016 to request an acceleration of its review. If it doesn’t or doesn’t demonstrate sufficient progress, it will also be rated non-compliant.

As Marshall Islands and Federated States of Micronesia are already on the Belgian black list, their rating doesn’t change anything regarding the obligation to report payments made to those countries.

For Panama, Guatemala, Trinidad and Tobago their non-compliant rating means that payments made as from 4 November 2016 fall in the scope of the reporting obligation.

 

As a reminder, companies subject to Belgian corporate income tax and non-resident corporate income tax have to report payments totaling at least 100.000 EUR per financial year to beneficiaries established in countries considered as tax havens.

The tax havens are determined by two lists:

 

OECD list

This list includes States which, according to the Global Forum on Tax Transparency and Exchange of Information of the OECD, do not effectively or substantially apply the OECD exchange of information standard. The presence of a State on the list at the moment of the payment is sufficient to require its reporting.

 

Belgian list

This list contains States without or with low taxation. The criteria used to constitute this list have been recently expanded.

Will be on the list state(s) outside the EEA:

  • where the nominal corporate tax rate is less than 10% (existing criterion)
  • Or where companies are not subject to corporate tax on domestic or foreign income (new criterion)
  • Or have an effective corporate tax rate on foreign income of less than 15% (new criterion)

For the moment the Belgian list included in art. 179 RD BITC has not been adapted to the new criteria.

© 2017 KPMG Tax and Legal Advisers, a Belgian Civil Cooperative Company with Limited Liability (burg. CVBA/SCRL civile) and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved.

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