The published information also includes certain extensions to the deadlines for first time submissions.
All Belgian entities or Belgian permanent establishments of a multinational group that meet the eligibility criteria will need to be well-prepared to comply with the reporting obligations, which will be mandatory and apply from financial years starting on January 1 2016.
The following four forms have been published (the last three by Royal Decree):
- Country-by-Country Reporting (CbCR) notification form (275 CBC NOT) (click here for unofficial translation in English);
- CbCR filing form (Form 275 CBC) (click here for unofficial translation in English);
- Master file filing form (Form 275 MF) (click her for unofficial translation in English); and
- Local file filing form (Form 275 LF) (click here for unofficial translation in English).
CbCR notification form offers extended filing deadline
The CbCR notification form (275 CBC NOT) must be submitted by Belgian group entities of a multinational group that are also required to submit a CbC report.
In accordance with the Programme Law, the 275 CBC NOT form should be filed before the end of 2016 for accounting periods starting on January 1 2016. However, the Belgian tax authorities have postponed the final date for this filing deadline to September 30 2017, but this extension applies only on this occasion. It should be noted that, at this moment, Form 275 CBC NOT cannot be filed electronically.
Details supplied in the form should tell the Belgian tax administration if the Belgian group entity is the ultimate parent company, the surrogate parent company, or the Belgian group entity as described in Article 322/2, §2 of the Corporate Income Tax Law 1992 (CIT 92) (measures in case of non-cooperation).
In accordance with the Programme Law, the Belgian group entity, when confronted with the situation described in Article 322/2, §2 CIT 92, is obliged to make all efforts to submit a CbC report for the multinational group to which it belongs and ensure that it is as complete as possible. When the ultimate parent entity continues to refuse to make the requested information available to the Belgian group entity, the Belgian group entity is obliged to notify the Belgian tax administration of this persistent refusal. This refusal will also be shared with EU member states.
CbC filing form
The CbC filing form (Form 275 CBC) must also be submitted by Belgian group entities of a multinational group that are required to submit a CbC report.
In line with the Programme Law, forms have to be submitted within 12 months after the last day of the reporting period of the multinational group. Unlike the 275 CBC NOT, there is no extension to the submission date.
The completed form should provide the Belgian tax administration with details on the allocation of income, taxes and business activities of the multinational on a per jurisdiction basis. In general, Form 275 CBC follows the OECD BEPS Action 13 template, which also contains the three table layout (Annex III to Chapter V of the revised OECD Transfer Pricing Guidelines).
Master file filing form
The master file filing form (Form 275 MF) contains five sections that coincide with the five headings of the OECD BEPS Action 13 information overview (Annex I to Chapter V of the revised OECD Transfer Pricing Guidelines). However, it does not contain the bullet point detailed information listed by the OECD. Nevertheless, the explanatory note that accompanies the form provides an overview of the information that should be included in the form’s five sections that coincide with the OECD listing.
Eligible Belgian group entities can choose to either complete the boxes in the form, or they may include the information in separate, readable, PDF files when they tick the boxes in the form confirming that such attachments are included. In the latter case, all five boxes should be ticked and taxpayers are allowed to include one PDF file that contains all the information – i.e. a centrally drafted OECD compliant master file.
In line with the Programme Law, companies must submit the forms within 12 months after the last day of the reporting period of the Belgian group entity.
Local file filing form offers partial delay
The local file filing form (Form 275 LF) contains three sections:
- General company information (sections A1 – A8);
- Detailed information on each business unit that exceeds the threshold of cross-border transactions with group entities in the last closed financial year (sections B1 – B12); and
- Other documents (optional) (section C1).
Most importantly, this form should be submitted together with the tax return, which does not coincide with the local file template in Annex II to Chapter V of the revised OECD Transfer Pricing Guidelines.
However, parts of this list are requested for in the first general company information sections, and local files that are prepared in accordance with the OECD Transfer Pricing Guidelines can be attached to the form, as part of the third section (other documents).
Only section B10 (in the detailed information sections) refers to transfer pricing studies, whereas the explanatory note mentions that it can be “useful” to include such transfer pricing studies as drafted in accordance with OECD BEPS Action 13 as it can further describe in more detail the applied transfer pricing methodology. However, there seems to be no obligation to do so.
The bulk of the additional information required in excess of what has been proposed by OECD BEPS Action 13 is within the second part of the form (detailed information). Details are required for each business unit that exceeds the €1 million ($1.1 million) threshold of controlled cross-border transactions. The type of information required relates to standardised activity descriptions and transaction volumes and metrics on a myriad of transaction types (per business unit). It should be noted that for certain sections (tables B3 – B6) a materiality threshold of €25,000 per transaction applies.
The first part of Form 275 LF, containing general information requests (sections A1 - A8), and the third part, containing the option to include “other documents” that the taxpayer may find useful to file (section C1), enters into force from January 1 2016 as set in the Programme Law. The second part, however, containing the detailed information required for material controlled transactions per business unit (sections B1 - B12), will enter into force from January 1 2017.
TP Week correspondent for Belgium