BELGIUM Law and Practice Contributed by: Robin Minjauw and Anouk Van der Mast, Tiberghien
tion clause obliges the competent authorities (through an independent arbiter) to reach a binding decision when MAP negotiations fail. Belgium has also opted into the arbitration procedure (“final offer approach”) under the MLI. As a result, an arbitration clause has been included in nearly 20 covered tax agreements. The EU Arbitration Convention and the Act of 2 May 2019 provide for an arbitration resolution mechanism. If the competent authorities concerned fail to reach an agreement that eliminates double taxation, they shall set up an independent advisory commission charged with delivering its opinion on the elimination of the double taxation in question. Such opinion is binding for the competent authorities.
Unilateral APAs are issued by the Service for Advance Decisions (the “Ruling Commission”), which is an autonomous section of the tax authorities. APAs focus on the arm’s length character of intercompany prices based on functions, risks and assets used. Bilateral or multilateral APAs are handled by the Inter - national Relations Department of the tax authorities, which co-ordinates the APA requests with the other relevant jurisdictions. The legal base for the applica - tion of bilateral and multilateral APAs is (generally) Article 25 of Belgium’s tax treaties. 9.2 Other Mechanisms In order to obtain tax certainty in relation to interna - tional tax matters, taxpayers can obtain an advance tax ruling from the Ruling Commission. The scope of advance tax rulings is very broad, covering a wide range of federal tax matters (eg, qualification of income, restructurings). Such rulings are binding deci - sions on the tax authorities and are generally valid for a maximum period of five years.
9. Dispute Prevention 9.1 Advance Pricing Agreements
Belgium has an advance pricing agreement (APA) pro - gramme. It provides taxpayers with advance certainty on transfer pricing matters to avoid future disputes with the tax authorities.
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