Belgium: Tax havens, implications for payments to Luxembourg and Cyprus

Belgium: Tax havens, payments to Luxembourg and Cyprus

The Belgian tax authorities on 3 September 2015 issued guidance—a circular letter—concerning tax deductions with respect to payments made into “tax haven” jurisdictions, specifically payments made into Luxembourg and Cyprus and whether there is a reporting obligation imposed on the taxpayer.


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In general, payments made into tax havens must be reported if the jurisdiction is:

  • Listed on a Belgian list of tax havens
  • Listed as a tax haven that does not comply with the OECD standard on transparency and the exchange of information for tax purposes

Four jurisdictions were listed as non-compliant in November 2013—Luxembourg, Cyprus, the Seychelles, and the British Virgin Islands (BVIs). Accordingly, payments totaling €100,000 or more made into these “tax havens” in tax periods beginning on or after 1 December 2013, in principle, were to be reported. Otherwise, the expenses were not deductible.

By means of a circular letter released 3 September 2015, the tax authorities have addressed the treatment of payments made into Luxembourg and Cyprus and the rules concerning the reporting requirement. The non-reporting of payments to Luxembourg and Cyprus for corporate tax purposes does not automatically result in the non-deductibility of the underlying expenses.


Read a September 2015 report prepared by the KPMG member firm in Belgium: Payments to Luxembourg and Cyprus not subject to reporting obligation?  

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