The e-Tax Flash of KPMG Tax Advisers wants to draw your attention on tax topics.
Reference is made to our previous Tax News Flashes dated May 16, 2016 and July 5, 2016 in relation to the introduction of Transfer pricing documentation requirements in Belgium. Particularly, Belgium has implemented OECD’s Action 13 on transfer pricing documentation by requiring certain reporting Forms to be filed.
The earlier Tax News Flashes referred to detail (i) the thresholds to be considered in assessing whether or not all or some of the below listed Forms should be filed, (ii) the first financial year to be considered in relation to the filing requirements, and (iii) due dates for the submission of the documentation requirements (i.e. through specific Forms).
As announced in the Law of July 1, 2016, the format of the different reporting and notification Forms would still be published through a Royal Decree. Today, the announced Forms have finally been published in the Belgian Gazette. Each Form has also been accompanied by additional commentaries, which further details how to interpret and complete these Forms.
Country-by-Country Reporting Form
The Country-by-Country (CbC) reporting Form is in line with the format (three tables) published on October 5, 2016 by the OECD’s Action 13 Report of the Base Erosion and Profit Shifting (BEPS) project (“Action 13 Report”).
Master File Form
The Master File Form is also composed of the content as suggested in the Action 13 Report, and should describe the following main elements: (i) Organizational structure, (ii) Description of MNE’s Business(es) (iii) MNE’s Intangibles, (iv) MNE’s intercompany financial activities and (v) MNE’s financial and tax positions.
From the commentaries to the Belgian Master File Form, it appears that for some of the above listed sections, slightly more detailed information is being requested compared to the OECD requirements (e.g. request to list paid contributions in relation to the main intangible property transactions). However, in practice, it would be generally expected that Master Files prepared in line with OECD guidance are likely to be acceptable.
Local File Form
The Local File Form can be argued to go beyond the OECD Action Point 13 requirements, and the completion thereof will be a demanding exercise for taxpayers.
The Local File Form is composed of three parts, i.e.:
It should be noted that, whereas the first part (“A” labeled tables) and third part (“C” labeled table) of the Local File should be filed for accounting years starting on or after January 1, 2016 (in line with the CbC Reporting and Master File requirements), the second part (“B” labeled tables) of the Local File should only be filed as for accounting years starting on or after January 1, 2017.
As foreseen in the Law of July 1, 2016, each constituent entity, part of a MNE which falls under the Country-by-Country requirements, should notify the Belgian tax authorities before the end of the Reporting Period the following:
The CbC Notification Form submission will only have to be performed for the first time by September 30, 2017. This is an extension of the due date compared to what had initially been announced in the Law (i.e. a notification requirement by the end of the reporting period).
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