BELGIUM Law and Practice Contributed by: Aldo Engels, Emile Bauwens, Emma Parduyns and Vincenzo Vilardi, Loyens & Loeff
1 January 2023. It is further supported by the provisions of applicable double tax treaties. In addition, Belgium has adopted several enhanced transfer pricing audit initiatives, including the following. • The International Compliance Assurance Programme (ICAP) – a voluntary risk assess - ment and assurance programme led by the OECD, in which Belgium participates. ICAP allows multinational enterprises (MNEs) to obtain comfort on their transfer pricing posi - tions through pre-audit engagement, offering greater tax certainty and reducing the likeli - hood of disputes by fostering early coopera - tion with tax authorities. • EU Joint Audit Pilot Projects – Belgium has taken part in pilot projects involving simulta - neous audits of the same MNE by multiple EU member states, aiming to streamline tax compliance and improve consistency across jurisdictions. • The Co-operative Tax Compliance Pro - gramme (CTCP) – Belgium’s horizontal moni - toring programme allows very large taxpayers to proactively engage with the tax authorities, reducing the likelihood of formal audits. The programme fosters close co-operation and provides the benefit of a single point of con - tact within the tax administration. 7. Advance Pricing Agreements (APAs) 7.1 Programmes Allowing for Rulings Regarding Transfer Pricing With the Law of 24 December 2002, the Belgian legislature introduced a system of advance deci - sions that provide legal certainty for taxpayers.
Within the existing system of advance decisions, a taxpayer can request a unilateral advance pric - ing agreement (APA) that specifically addresses transfer pricing (eg, the methodology used, com - parables, critical assumptions regarding future events, etc). No separate procedure exists for APAs; they follow the same procedure as regular advance tax rulings. An APA can be requested unilaterally, bilaterally or multilaterally. Typically, the request must be accompanied by a transfer pricing study that includes: • a comparability analysis (including a func - tional analysis); • a description of the transfer pricing method(s) used; and • a transfer pricing benchmark. The Belgian APA process is a performant system and an effective way for the taxpayer to avoid disputes with the BTA. Where a taxpayer has obtained an APA confirming the arm’s length nature of its transfer pricing policy, the BTA is in principle bound by such agreement. Upon audit, the BTA may nevertheless verify whether the facts and circumstances underlying the APA have not changed and whether the transfer pric - ing policy confirmed in the APA has been cor - rectly applied in practice. The processing time for a unilateral APA applica - tion varies depending on the complexity of the file, the completeness of the information provid - ed and the timing of submission. Nevertheless, if well prepared, it should be possible to obtain an APA within three to six months. To obtain legal certainty concerning transfer pricing in all jurisdictions affected by a particular transaction, a bilateral or multilateral APA can be
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