By Stefaan De Ceulaer (Director, Tax and Legal Support, PKF International)
The Belgian Parliament on June 29 adopted the Programme Act, which introduces in Belgian tax law specific transfer pricing documentation requirements, that is, in article 321/1 to 321/7 of the Income Tax Code (Programme law of July 1, 2016 gazetted on July 4, 2016), in response to Action 13 of the OECD’s base erosion and profit shifting (BEPS project.
At that point in time, it was also communicated that failure to fulfill these obligations would result in administrative fines ranging from EUR1,250 to EUR25,000.
The exact brackets were gazetted on July 9, 2018, by means of a Royal Decree dated June 29, 2018.
If the master file, the local file, or the country-by-country report is not submitted, or if it is submitted late, or it is submitted in an incomplete form, the tax authorities can impose a fine on the Belgian group entity. The fine shall range between EUR1,250 to EUR25,000.
However, if the tax authorities attribute the offence(s) to malicious intent or the intention to evade taxes, a fine of EUR12,500 can be imposed.
The exact brackets may be summarized as below:
| Nature of the offence | Administrative fine (EUR) |
| A. Offence due to circumstances independent of the taxpayer’s will | Nil |
| B. Offence not due to malicious intent or to the intention to evade taxes – | |
| First offence: | Nil |
| Second offence: | EUR1,250 |
| Third offence: | EUR6,250 |
| Fourth offence: | EUR12,500 |
| Subsequent offences: | EUR25,000 |
| C. Offence due to malicious intent or to the intention to evade taxes (including the filing of deliberate incomplete or incorrect returns) | |
| First offence | EUR12,500 |
| Subsequent offences | EUR25,000 |
The author is Director, Tax and Legal Support at PKF International. You may connect with him on Linkedin here.