BELGIUM Law and Practice Contributed by: Aldo Engels, Emile Bauwens, Emma Parduyns and Vincenzo Vilardi, Loyens & Loeff
lead to the desired outcome, judicial proceed - ings can be initiated. Administrative Proceedings Taxpayers have a period of 12 months after receiving the tax assessment to initiate admin - istrative appeal proceedings. The appeal can be lodged by filing a tax complaint, which will be examined by the General Adviser ( Adviseur- Generaal/Conseiller Général ) who issues a deci - sion of notice. This decision is binding on the BTA, and does not allow an appeal by the BTA. In general, a decision may be expected within six months after filing the tax complaint. It is important to note that the taxpayer can only initiate judicial proceedings after having received a (negative) decision from the regional tax ser - vice. By way of exception, a petition with the court can be lodged if the regional director does not provide its decision within six months after filing the tax complaint. A taxpayer can file a request for mediation with the tax mediation service during the phase of administrative proceedings, meaning before the regional director has rendered its decision of notice or before initiating judicial proceedings when the administrative phase can be deemed otherwise exhausted. The tax mediation ser - vice can only facilitate mediation between the concerned parties and can only result in a non- binding proposal. Judicial Proceedings Where the taxpayer wishes to initiate judicial proceedings after exhausting the administrative appeal, a petition must be filed before the court of first instance. The petition must be filed within three months after the decision of notice by the General Adviser ( Adviseur-Generaal/Conseiller Général ).
The judgment of the court of first instance is open for appeal. Appeals must be brought before a court of appeal within one month after the judg - ment of the court of first instance is served. Finally, the taxpayer can bring the judgment of the court of appeal before the supreme court (Court of Cassation). This should be done within three months after the judgment of the court of appeal was served. The Court of Cassation only decides on points of law, and will not reconsider findings of facts. 14. Judicial Precedent 14.1 Judicial Precedent on Transfer Pricing Belgian transfer pricing case law is presently still quite limited (around five to ten relatively recent cases with significant practical relevance based on the current framework), but is gaining impor - tance. As the number of transfer pricing audits is substantially increasing, this may lead to more case law in the future. There is nevertheless extensive established case law on the interpretation of the notion of “abnor- mal or benevolent advantage” . Applying this notion under Articles 26, 79 and 206/3 ITC, the Belgian courts have traditionally advocated for a subjective and pragmatic approach. Therefore, the courts have accepted more subjective argu - ments to determine the arm’s length character of transactions, such as the global balance at group level, the specific characteristics of the group relationship and financial difficulties of group companies. In this respect, the Belgian courts have also accepted direct and indirect set-offs based on the economic reality in a group context.
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