Belgium has implemented the Country-by-Country Reporting (CbCR) requirements in line with the OECD’s BEPS Action Plan, specifically following Action 13 on transfer pricing documentation. The regulation is enforced by the Belgian Federal Public Service (FPS) Finance, which oversees MNE compliance with CbCR obligations. This guide provides finance directors of multinational enterprises (MNEs) operating in Belgium with essential information on applicability, reporting requirements, submission deadlines, penalties, and additional resources to ensure full compliance with Belgian CbCR regulations.

Law of 1 July 2016

The Law of 1 July 2016 in Belgium, also known as “Loi De Croo” or “Belgie programmawet 2016021055”, introduced significant changes to the taxation and regulation of platform work in Belgium. Here are the key aspects of this law:

Main Provisions

The law established a favorable tax regime for platform workers, aiming to create a more positive environment for new forms of work. Key features include:

• Platform workers are taxed at a rate of 20% with a 50% deduction
• Exemption from VAT and social security contributions
• Applies to income below a certain threshold (initially €5,000 per year, later increased)

Objectives and Scope

The primary motivation behind this law was to encourage the growth of the platform economy by reducing administrative burdens for both platforms and workers. The law:

• Classifies earnings from platform work as “miscellaneous income” rather than “income from professional activities”
• Applies to work conducted through officially accredited platforms
• Covers various types of platform work, including services and goods sales

Platform Accreditation

The law is accompanied by a Royal Decree (12 January 2017) that sets conditions for platforms to receive official accreditation:

• Platforms must apply for accreditation to enable their workers to use the favorable tax regime
• Accreditation is not mandatory for platforms to operate in Belgium
• The Federal Public Service Finance maintains a list of accredited platforms

Subsequent Developments

1. 2018 Revision: The government introduced a revised scheme allowing platform workers to earn up to €6,000 annually, fully exempt from taxes and social security contributions.
2. Constitutional Court Ruling: In April 2020, the Constitutional Court annulled the 2018 framework following complaints from trade unions and other organizations, citing concerns about unfair competition and discrimination.

Significance

This law was one of the first initiatives in the European Union to address taxation of income earned in the platform economy. It aimed to:

• Reduce administrative burdens for workers
• Provide the government with insights into platform operations
• Make information about accredited platforms publicly available

However, the voluntary nature of accreditation means the list of platforms is not exhaustive, potentially limiting its effectiveness in capturing the full scope of platform work in Belgium.

The Law of 1 July 2016 in Belgium is related to country-by-country reporting (CbCR) in the following ways:

1. Implementation of BEPS Action 13:
   The Law of 1 July 2016, along with subsequent Royal Decrees, introduced the results of the OECD’s Base Erosion and Profit Shifting (BEPS) Action 13 into Belgian tax law. This action specifically deals with country-by-country reporting requirements for multinational enterprises.
2. CbCR Requirements:
   As a result of this law, multinational groups with operations in Belgium are required, under certain circumstances, to submit a country-by-country report. This report provides tax authorities with a global picture of where profits, tax, and economic activities of multinational enterprises are reported.
3. Automatic Exchange of Information:
   The CbCR submitted under this law is subject to automatic exchange of information (AEoI) with other EU member states, as per the Act of 31 July 2017 implementing DAC4 (Council Directive (EU) 2016/881 of 25 May 2016). This ensures that tax authorities across the EU have access to comprehensive information about multinational enterprises operating in their jurisdictions.
4. Circular and Guidance:
   To provide clarity on the implementation of BEPS Action 13, including CbCR, the Belgian tax administration adopted a circular in the form of Frequently Asked Questions (Circular 2020/C/88). This guidance helps multinational enterprises understand and comply with their reporting obligations.
5. Scope and Application:
   The CbCR requirements apply to multinational groups that meet certain thresholds, typically based on consolidated group revenue. The exact thresholds and conditions are specified in the Belgian legislation implementing the OECD guidelines.
6. Compliance and Penalties:
   While not explicitly mentioned in the search results for this specific law, it’s common for such reporting requirements to be accompanied by penalties for non-compliance. Multinational enterprises operating in Belgium need to ensure they meet their CbCR obligations to avoid potential sanctions.

In summary, the Law of 1 July 2016 played a crucial role in bringing Belgium’s tax reporting requirements for multinational enterprises in line with international standards, particularly those set by the OECD’s BEPS project. It established the framework for country-by-country reporting in Belgium, which is an essential tool for tax authorities to combat tax avoidance and ensure fair taxation of multinational enterprises.

Royal Decree of 28 October 2016

The Royal Decree of 28 October 2016 in Belgium was an important piece of legislation related to transfer pricing documentation and country-by-country reporting requirements. Here are the key points about this decree:

1. Implementation of BEPS Action 13:
   The decree implemented the OECD’s Base Erosion and Profit Shifting (BEPS) Action 13 into Belgian tax law. This action focuses on transfer pricing documentation and country-by-country reporting for multinational enterprises.
2. Transfer Pricing Forms:
   It introduced mandatory transfer pricing forms applicable from January 1, 2016. These forms included:

• Form 275.MF (Master File)
• Form 275.LF (Local File)
• Form 275.CBC.NOT (Country-by-Country Notification)

3. Thresholds for Reporting:
   The decree established thresholds for companies required to file these forms. For example, groups with consolidated revenue equal to or above €750 million were required to file the CbC notification form.
4. Content Requirements:
   It specified the information to be included in each form, such as descriptions of business activities, intangible assets, and financing arrangements within multinational groups.
5. Alignment with OECD Guidelines:
   The requirements were designed to align with the OECD Transfer Pricing Guidelines and provide tax authorities with a comprehensive view of multinational enterprises’ operations.
6. Subsequent Updates:
   This decree was later replaced by new Royal Decrees published on 15 July 2024, which introduced modifications to these forms and expanded the reporting requirements.
7. Part of Broader Tax Transparency Efforts:
   The decree was part of Belgium’s efforts to enhance tax transparency and combat tax avoidance by multinational corporations.
8. Compliance Obligations:
   It created new compliance obligations for multinational enterprises operating in Belgium, requiring them to provide detailed information about their global operations and transfer pricing practices.

The Royal Decree of 28 October 2016 was a significant step in Belgium’s implementation of international standards for transfer pricing documentation and reporting, aimed at improving tax administration and preventing base erosion and profit shifting.