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Royal Decree setting the scale of fines in case of infringement of transfer pricing documentation obligations published

Royal Decree setting the scale of fines

A Royal Decree setting the scale of the administrative fines for the infringement of transfer pricing documentation requirements has been published in the Belgian Official Gazette of July 9, 2018.

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Royal Decree setting the scale of fines in case of infringement of transfer pricing documentation obligations published

A. Administrative fines in case of infringement

Taxpayers that fail to satisfy the reporting and filing requirements for transfer pricing documentation will be subject to administrative fines ranging from 1.250 EUR to 25.000 EUR, as from the second infringement (article 445, §3 Belgian Income Tax Code 1992 (“BITC”). 

The Royal Decree clarifies the above and introduces the scale of the administrative fines that will be applied. 

As stated in the table below, the amount of the fine will depend on the type of the infringement and the recurrence thereof. 

Type of the infringement EUR
Infringement due to circumstances beyond the taxpayer’s control  0
Infringement not attributable to bad faith or intention of tax evasion :   
First infringement 0
Second infringement 1.250,00
Third infringement 6.250,00
Fourth infringement 12.500,00
Subsequent infringements  25.000,00
Infringement due to bad faith or intention of tax evasion (including the filing of voluntarily incomplete or inaccurate forms)  
First infringement 12.500,00
Subsequent infringements  25.000,00

B. Transfer pricing documentation requirements

In 2016, Belgium implemented the OECD’s BEPS Action 13 on transfer pricing documentation requiring companies that meet certain thresholds to file specific forms, i.e. Master File, Local File, Country-by-Country Report, Country-by-Country Reporting Notification (cfr. articles 311/1 to 321/6, introduced by law of July 1, 2016). 

For more information on the transfer pricing documentation requirements, reference is made to our previous E-tax flashes, dated May 17, 2016, July 6, 2016 and December 2, 2016. Those mainly provide information on the following matters:

  1. The thresholds to be considered in assessing whether a taxpayer should file the transfer pricing documentation forms;
  2. The filing date for each form;
  3. The format of each form.

Should you require further assistance in this matter, please contact your local KPMG tax adviser.

© 2018 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.

KPMG International Cooperative (“KPMG International”) is a Swiss entity.  Member firms of the KPMG network of independent firms are affiliated with KPMG International. KPMG International provides no client services. No member firm has any authority to obligate or bind KPMG International or any other member firm vis-à-vis third parties, nor does KPMG International have any such authority to obligate or bind any member firm.

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