In this latest edition of the WTS Transfer Pricing Newsletter, our colleagues from 13 countries provided an update on recently introduced legislations and cases. Additionally, developments in the field of transfer pricing, due to the economic and social impact of the ongoing COVID-19 pandemic are presented.

The deadline of the corporate income tax returns has been extended for the second time by the Minister of Finance, initially set 24 September 2020 (for companies with a financial year-end at 31 December 2019), first time extended to 29 October 2020, with the new due date currently set 16 November 2020. This extension has been granted after massive requests of accounting firms that were - and still are - overloaded with work due to the exceptional circumstances caused by the covid-19 crisis. More in particular, companies have been requesting assistance from accounting firms with regard to various measures taken by the Belgian tax authorities to support Belgian companies, amongst others, obtaining the appropriate support measures of the Belgian government, requesting deferment of payment of banks, apply for legal protection or bankruptcy, etc. This new postponement should allow accounting firms to submit the personal and corporate income tax returns in a (postponed) timely manner.

A NEW, YET FAMILIAR BRAND TO UNDERSCORE OUR HOLISTIC VIEW ON OUR CLIENT’S CHALLENGES AND ASPIRATIONS.

We are excited to announce that, as from now, T/A economics will be deploying its services as Tiberghien economics. Exactly 5 years after we established our privileged partnership with the highly regarded BeLux law firm Tiberghien, and based on the successful experiences we had in jointly serving our mutual clients, we felt it natural to take this next step, in order to give the market a strong signal that Tiberghien lawyers and Tiberghien economics will further intensify their network cooperation to address the challenges of their clients with a multidisciplinary mindset.

Although the arm’s-length principle, which forms the basis of the framework of transfer pricing rules, has had a long international history, it was only explicitly introduced into Belgian legislation in 2004. The Belgian legislature used the Organisation for Economic Co-operation and Development (OECD) Transfer Pricing Guidelines for Multinational Enterprises and Tax Administrations Guidelines (the OECD Guidelines) and the OECD Model Tax Convention as inspiration.

Belgium offers a full range of tax incentives enabling companies to structure their R&D activities, as well as the valorization of the intellectual property (IP) resulting from R&D activities. This comprehensive R&D regime consists of tax deductions on qualifying IP income, deductions on R&D investments and (refundable) tax credits, cash savings from partial exemption from withholding tax for qualified researchers and full tax exemption of R&D subsidies. 

The Circular 2020/C/95/Frequently Asked Questions (FAQ) (Dutch version / French version) on the Belgian innovation deduction was published on July 8, 2020. The innovation deduction provides for a deduction of 85% of the net income from intellectual property (IP). This results in an effective tax rate of 4.4% (2019) and 3.8% (as from 2020) on the net income.

The filing date for the local file form (form 275 LF) as part of the mandatory transfer pricing documentation in Belgium is approaching for a large amount of Belgian entities that form part of a multinational group.

T/A economics is proud to announce Tine Slaedts joining as a partner. Tine brings a wealth of experience (+23 years) to the team.

Tine Slaedts started her career at the Belgian ministry of finance as a tax inspector, and subsequently went into consulting at the Big4. Most of the T/A economics team members have worked together with Tine at EY Belgium, where she helped managing the transfer pricing practice in Belgium and also in South Africa for some time in a stint of almost 12 years. As from April 2013, until recently, she has been responsible for building the transfer pricing practice and team at BDO. 

The first issue of the WTS Global Transfer Pricing Newsletter provides you with an update on the recent news and cases in the field of transfer pricing in 14 countries as well as an OECD update on Pillar 1.