Country-by-Country (CbC) reporting is a system implemented by tax authorities worldwide to collect information on the financial activities and operations of multinational enterprises (MNEs). The purpose of CbC reporting is to increase transparency, offer tax authorities data to evaluate transfer pricing risks, and enhance compliance with tax laws.

In Belgium, CbC reporting requirements were introduced by the Belgian Law of 1 December 2016. It applies to MNEs with a consolidated group revenue exceeding €750 million. If your company meets this requirement, it is essential to be familiar with the regulations and rules surrounding CbC reporting in Belgium to comply with the law and avoid penalties.

Process and Requirements

To adhere to CbC reporting rules in Belgium, you need to submit a CbC report annually to the Belgian tax authorities. The report should include a comprehensive breakdown of your MNE’s operations and financial activities in each jurisdiction where it operates.

The report must include the following information:

• Revenues broken down by jurisdictions
• Profit or loss before income tax, broken down by jurisdictions
• Income tax paid and accrued, broken down by jurisdictions
• Capital, broken down by jurisdictions
• Accumulated earnings, broken down by jurisdictions
• Number of employees, broken down by jurisdictions
• Tangible assets other than cash and cash equivalents, broken down by jurisdictions

The report must be filed within twelve months after the end of the fiscal year. For instance, if your company’s fiscal year ends on December 31st, you must file the report by December 31st of the following year.

Penalties for Non-Compliance

Failure to comply with CbC reporting regulations in Belgium can lead to significant fines and other sanctions. The penalty for not submitting or submitting the report late is a fixed fee of €1,500. However, this penalty may be waived if the Belgian tax authorities are convinced that the failure to file on time was due to reasonable circumstances.

Additionally, the Belgian tax authorities can impose penalties for providing incorrect, incomplete, or false information in the CbC report. The penalty for providing false or misleading information is €1,500 per inaccuracy or false statement.

Confidentiality and Privacy

The information contained in the CbC report is considered confidential and is shared only with other tax authorities according to international agreements. However, Belgian tax authorities may also disclose information to other government agencies or law enforcement agencies in specific situations.

It is important to note that the Belgian tax authorities are committed to respecting privacy and confidentiality and have implemented measures to safeguard sensitive information. The Belgian tax authorities comply with the General Data Protection Regulation and other relevant legislation to ensure that personal and confidential information is not disclosed unlawfully.

Conclusion

In summary, CbC reporting is a vital instrument for tax authorities to collect data on the financial activities and operations of MNEs. In Belgium, MNEs with a consolidated group revenue exceeding €750 million must comply with CbC reporting requirements.

To comply with CbC reporting regulations in Belgium, MNEs must submit an annual report to the Belgian tax authorities, including detailed information about their operations and financial activities in each jurisdiction where they operate. Failure to comply with these regulations can lead to significant fines and other sanctions.

The Belgian tax authorities are committed to respecting privacy and confidentiality and have put measures in place to protect sensitive information. By understanding the rules and regulations surrounding CbC reporting in Belgium, MNEs can ensure compliance with the law and avoid penalties.