Transfer Pricing 2025

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

to financial years starting on or after 1 January 2025. The new master file requirements go beyond the OECD model, necessitating changes to the group master file to comply with Belgian legisla - tion. These changes include, among others: • a comparison of a profit allocation analysis based on value-creating functions and the traditional transfer pricing models in place; • the inclusion of a six-step DEMPE analysis, as described in the OECD Guidelines; and • the identification of all transferred and used hard-to-value intangibles including the enti - ties that own them and have contributed to their development. The new local file form obliges in-scope com - panies to file available transfer pricing docu - mentation as an attachment to the Belgian local file, including the full OECD Model local file. In addition, CCAs, rulings and in-house insurance policies should also be attached. 9. Alignment With OECD Transfer Pricing Guidelines 9.1 Alignment and Differences Belgian law does not contain any rules deviat - ing from the OECD Guidelines. Although not expressly stated in the law, the OECD Guidelines are generally followed in Belgian tax practice and applied by the BTA and the Ruling Commis - sion. An exception in this respect is the Belgian local file form, which considerably deviates from the OECD local file report under Chapter V of the OECD Guidelines (see 8.2 Transfer Pricing Documentation ).

The OECD Guidelines are consistently applied in published circulars. In the TP Circular, the BTA confirms adhering to the general principles included in the OECD Guidelines. The TP Circu - lar provides an overview of the different chapters of the OECD Guidelines (including guidance on financial transactions) and refers extensively to several of the OECD Guidelines’ paragraphs. Nevertheless, it is argued in legal doctrine that certain “clarifying positions” of the BTA in the TP Circular deviate from the OECD Guidelines (see 11.3 Unique Transfer Pricing Rules or Prac- tices ). Belgian case law has ruled on the position of the OECD Guidelines in Belgian practice. In two cases (case No 2016/AR/455 dated 8 June 2021( “Uniclic” ), and case No 2012/AR/2901 dat - ed 16 September 2014( “Beaulieu” )), the Ghent Court of Appeal ruled that the OECD Guidelines are not obligatory or enforceable but are a mere recommendation. It proceeded by stating that the OECD Guidelines do contain internationally accepted principles which can be applied by the BTA as they provide sufficient guarantees in terms of objectivity and reliability. In addition, in the 2021 case, the court took a position on the non-retroactive application of the DEMPE concept in transfer pricing, in which it ruled that only the economical context and legal framework of the period to which the facts relate should be considered. The court stated that a tax assessment can only be vested based on a more recent version of the OECD Guidelines if the new provisions are a mere clarification of the existing guidelines. 9.2 Arm’s Length Principle Belgian transfer pricing rules do not depart from the OECD’s arm’s length principle as laid down in Article 9 of the OECD Model Tax Convention.

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