BELGIUM Law and Practice Contributed by: Aldo Engels, Emile Bauwens, Emma Parduyns and Vincenzo Vilardi, Loyens & Loeff
Since 2018, no deduction of current year losses and deferred tax assets (eg, carry-forward tax losses) can be made on the taxable basis as adjusted as a result of a tax audit, except in rela - tion to dividends received during the same tax - able period. This applies where the BTA imposes a tax increase of (at least) 10%. Hence, a taxpay - er may have an interest in spontaneously cor - recting its tax return and applying an upwards adjustment to its taxable basis if a transaction was not arm’s length. By doing so, the taxpayer may avoid the possibility that a future adjustment upon an audit might constitute its minimum tax - able basis. The recent coalition agreement pro - vides for a partial relaxation of this rule: going forward, the limitation would no longer apply to the current year result, but only to carry-forward deductions (eg, tax losses from previous years). A spontaneous upwards adjustment could be made in two ways depending on whether or not the tax assessment has been vested yet. As long as the tax assessment is not vested, a taxpayer could make an informal request with the compe - tent tax service to correct its tax return. Follow - ing vesting of the tax assessment, the taxpayer can introduce a tax appeal against its own tax return within a one-year period. 5.2 Secondary Transfer Pricing Adjustments Belgium does not have rules on secondary adjustments.
tax-related information are shared either auto - matically or on request. As an EU member, Belgium has implemented EU Directive 2011/16/EU regarding the mandatory automatic exchange of information in the field of taxation (as repeatedly amended) providing for various exchange-of-information mechanisms, such as: • the exchange of information on request; • the exchange of cross-border tax rulings; • the exchange of country-by-country reports; and • the exchange of mandatory disclosure reports. The BTA actively makes use of these instru - ments in the framework of transfer pricing audits (eg, selecting taxpayers subject to audit based on cross-border information received, making requests for exchange of information with for - eign tax authorities in the framework of an audit). Belgium has further adhered to the various OECD initiatives on the exchange of informa - tion in the framework of the BEPS project, such as the cross-border exchange of tax rulings and country-by-country reports. 6.2 Joint Audits Belgium participates in joint transfer pricing audits, allowing tax authorities from other EU member states to collaborate and take part in Belgian audits (and vice versa). These audits fol - low the same procedural rules as standard Bel - gian tax audits, and taxpayers retain the same rights and obligations. This possibility stems from the implementation of the EU DAC7 Directive, which introduced a legal framework for joint audits in Belgium as of
6. Cross-Border Information Sharing 6.1 Sharing Taxpayer Information
Belgium has an extensive network of treaties and agreements under which various types of
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