BELGIUM Law and Practice Contributed by: Robin Minjauw and Anouk Van der Mast, Tiberghien
4.4 Specific Features or Deviations of Pillar Two The Belgian legislation aligns closely with the OECD framework and remains fully compliant with the EU Pillar Two Directive. Furthermore, specific procedural provisions have been introduced to extend the exist - ing tax prepayment regime to the Pillar Two top-up taxes (QDMTT, IIR and UTPR), mirroring the rules cur - rently applicable to corporate income tax. 4.5 Digital Services Tax The Belgian government has announced plans for a digital tax, though it intends to prioritise a harmonised EU framework. In the absence of a timely EU initiative, Belgium is prepared to implement a unilateral legal framework in 2027. 5. Anti-Avoidance and Anti-Evasion Measures 5.1 Definition and Identification of Tax Fraud, Evasion, Tax Avoidance and Abusive Schemes Tax evasion (fraud) and tax avoidance are not defined under Belgian law. Tax evasion generally refers to an infraction of tax law committed with the aim of escaping or reducing taxa - tion. It combines a material breach of the tax norm and a deliberate intention to avoid taxation. Tax evasion may lead to criminal prosecution. Tax avoidance, by contrast, involves legally structuring transactions to reduce tax liability. However, under the Belgian gen - eral anti-abuse rule (GAAR) (Article 344, §1 ITC 92), arrangements that are artificial and aimed primarily at obtaining a tax advantage contrary to the purpose of the law are considered “abusive”. 5.2 Anti-Avoidance Mechanisms Belgium has implemented a GAAR, as well as spe - cific anti-abuse rules (SAARs) in order to combat tax abuse. The Belgian GAAR requires an objective element – acting contrary to the purpose of the tax provision(s) – and a subjective element – wholly arti - ficial arrangements aimed solely at obtaining a tax advantage without any genuine economic objective. The GAAR allows the Belgian tax authorities to disre -
However, the Belgian Model Tax Convention includes a subject-to-tax clause to prevent double non-taxa - tion. Under this mechanism, the source state may tax the income if it is not effectively taxed in the residence state. Income that typically falls within the scope of the “other income” provision – depending on the word - ing of the relevant tax treaty – includes pensions of self-employed individuals, annuities ( lijfrentes ) and maintenance payments. 4. OECD/G20 Global Tax Reform 4.1 Pillar One – Amount B Belgium has recently clarified its position on Pillar One – Amount B in a circular letter. In particular, Belgium accepts Amount B as part of its transfer pricing practice, but not as a generally bind - ing or automatic simplification rule. The application is restricted to transactions where the involved jurisdic - tion: • qualifies as a “covered jurisdiction” supporting Amount B; • has implemented Amount B in its domestic law in line with the OECD 2024 Report (and subsequent updates); and • has a double tax treaty in force with Belgium. 4.2 Pillar One – Amount A This is not applicable. 4.3 Pillar Two Belgium implemented the Pillar Two global minimum tax via the Law of 19 December 2023, which entered into force on 31 December 2023. Subsequent amend - ments have been made to align the legislation with the latest OECD updates and commentaries. It should be noted that the Belgian Constitutional Court submitted a preliminary question to the Court of Justice of the European Union regarding the validity of the UTPR rules introduced in Belgium following the transposition of the Pillar 2 Directive (still pending).
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