Transfer Pricing 2025

BELGIUM Law and Practice Contributed by: Aldo Engels, Emile Bauwens, Emma Parduyns and Vincenzo Vilardi, Loyens & Loeff

entitled to (part of) the overall return derived from the intangible. According to the BTA, the most appropriate transfer pricing method for pricing transactions involving intangibles would generally be either: • the profit split method; • the CUP method; or • the cost-plus method (this latter only to remu - nerate routine contributions – eg, develop - ment of internal accounting software). The BTA further accepts the use of valuation techniques, such as: • the discounted cash flows method; The BTA emphasises the importance of clearly documenting the reasons justifying the choice of a given method in the taxpayer’s transfer pricing documentation. 4.2 Hard-to-Value Intangibles Belgian law does not contain special rules regarding hard-to-value intangibles. Where the BTA would want to make a transfer pricing correction, they would be bound by the ordinary statute of limitations (ranging between three and six years prior to the assessment year, depending on the case). • the relief from royalty method; • the residual value method; or • the premium profit method. In its TP Circular, the BTA provides that in the case of hard-to-value intangibles, ex post results can be used as presumptive evidence to evalu - ate whether future developments or events hav - ing impacted on the ex post results could have been anticipated by the taxpayer, as well as to

evaluate the reliability of the used assumptions when pricing the transaction. Although the BTA considers that it can perform a price adjustment or impose a different payment structure if demonstrated that the assumptions were not correct or the future developments would have been taken into account when pric - ing the transaction, the BTA also recognises that no adjustment can be imposed by the mere fact that ex post results deviate from ex ante price arrangements. 4.3 Cost Sharing/Cost Contribution Arrangements Belgium recognises cost sharing/cost con - tribution arrangements. No special rules are imposed. The BTA follows the OECD Guidelines in this respect. 5. Adjustments 5.1 Upward Transfer Pricing Adjustments Upwards adjustments are necessary when there are significant deviations between projected and actual profitability, especially for entities remu - nerated through one-sided methods (eg, dis - tributors or service providers). To mitigate risks associated with adjustments processed in the following year’s accounts, upwards adjustments can be temporarily reflect - ed in the tax return by increasing the company’s hidden reserves and later reversed. It is important to note that there is no specif - ic procedure allowing a taxpayer to perform upwards affirmative transfer pricing adjustments after filing its tax return.

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