Penalties | KPMG | BE

Penalties for non-compliance with national transfer pricing regulations

Penalties

Penalties for non-compliance with national transfer pricing regulations.

Penalties for non-compliance with national transfer pricing regulations.

Penalties for non-compliance with national transfer pricing regulations

Noncompliance Transfer Pricing Documentation

Companies and permanent establishment that fail to satisfy the reporting and filing requirements will be subject to penalties ranging from 1.250 EUR to 25.000 EUR, and this from the second infringement.

We are awaiting a separate Royal Decree elaborating the application details of the penalties.  

 

Transfer Pricing Audits

If a Belgian company, being member of a (multinational) group has not complied with the transfer pricing documentation or has financial ratios that deviate significantly from the standard financial ratios of the sector it is belonging to, the Belgian tax authorities will carry out an in-depth transfer pricing audit.

If this transfer pricing audit leads to transfer pricing adjustments, these adjustments will increase the taxable base of the company involved.  If the latter is in a taxpaying position and has not made sufficient tax prepayments in order to cover the resulting additional tax charge, the company will be subject to a tax increase due to insufficient tax prepayments.

With respect to penalties, no specific penalties are imposed in case of transfer pricing adjustments besides the general penalties as foreseen in case of any violation of the provisions of the Belgian Income Tax Code (penalties from 10% up to 200% are foreseen - penalties increase according to existence of bad faith and/or repeated infringement).

 

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