Transfer Pricing 2025

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

to the residual profits after having remunerated other entities on an arm’s length basis. For trans - actions involving intangibles, the TP Circular provides that if an entity does not control any risk regarding the development of the intangible and does not manage the financial risks, such entity should only be entitled to a risk-free return. 10. Relevance of the United Nations Practical Manual on Transfer Pricing 10.1 Impact of UN Practical Manual on Transfer Pricing The UN Practical Manual on Transfer Pricing does not have significant impact on Belgian transfer pricing practice. To the authors’ knowl - edge, there is no legislation, regulations, rulings or case law referring to this guidance. Belgium, being an OECD member country, follows the guidance provided by the OECD Guidelines. Bel - gium’s tax treaties generally include a transfer pricing provision based on Article 9 of the OECD Model Convention and the OECD Guidelines are usually applied in practice to evaluate the arm’s length character of transactions. 11. Safe Harbours or Other Unique Rules 11.1 Transfer Pricing Safe Harbours Belgian law does not include safe harbours for transfer pricing purposes. The BTA accepts the OECD’s simplified approach for determining the arm’s length remuneration of low value-adding intra-group services. Under this approach, the service provider can apply a profit mark-up of 5% on all costs related to the services (other than disbursements) and is

subject to less detailed documentation require - ments. The TP Circular explicitly clarifies which types of services may be within the scope of the simplified approach, in line with the OECD Guidelines. Although Belgium is part of the OECD Inclusive Framework, no official position has been taken yet as regards the implementation of Amount B; ie, the simplified and streamlined approach for pricing baseline marketing and distribution activities. 11.2 Rules on Savings Arising From Operating in the Jurisdiction Belgium has no specific rules governing savings that arise from operating in its jurisdiction. The TP Circular refers to the OECD Guidelines on how to deal with location savings in a transfer pricing analysis. 11.3 Unique Transfer Pricing Rules or Practices Belgium does not have unique rules applicable in the transfer pricing context. In its TP Circular, the BTA takes in the following notable positions (among others). • If, during a 12-month period, a participant in a cash pool has held a given (minimum) amount as a deposit or as borrowing, such an amount can no longer be priced as a cash pool transaction, but should be priced as a loan. The reclassification of a structural cash pool deposit or borrowing in a term loan is a frequently observed topic during audits. • According to the BTA, it is a rebuttable pre - sumption that the cash pool leader is a mere service provider and that its remuneration could generally be determined using a cost- based approach.

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