Fine levels set for non-compliance with transfer pricing documentation obligation

From tax year 2017 and, more specifically, the implementation of the mandatory transfer pricing documentation obligation, there was an immediate indication that, from a second violation of non-compliance with the transfer pricing obligations, a fine of between 1,250 EUR and 25,000 EUR (Article 445, §3 Income Tax Code 1992) could be imposed.

The scales of the administrative fines and their application methods had not been elaborated, however, in the Royal Decree. The relevant Royal Decree was recently published on 9 July 2018 in the Belgian Official Gazette.The maximum fine levels that can be imposed by the fiscal administration depend on the nature of the violation and its frequency or whether it has been repeated.

A distinction must be made between (1) involuntary violations (that are not sanctioned), (2) violations that cannot be attributed to dishonesty or the deliberate attempt by the tax-payer to avoid paying taxes and (3) violations that are due to dishonesty or the deliberate attempt to avoid paying taxes. It goes without saying that violations of this latter variety will result in a higher level of fine than the second type.

Please note that, in the context of this legislation, a failure to submit the transfer pricing documentation or submitting late, incomplete or inaccurate documentation will also be regarded as a violation, whether or not there has been a deliberate attempt to avoid taxes.

In summary:

A popular control structure
The all-powerful manager of a civil-law partnership: was it always a fiction?
The civil-law partnership has long been a popular control structure among wealth planners. In many cases, donors do not want to give up their assets entirely, and still want to retain some control over what they donate. Definitely in cases of transfers of family companies, the donors (often parents or family members) still want to retain control over the course of the business.  The advant
The tax framework
Company subsidies: exempted or not?
Various subsidies were briefly described in the article by our colleagues from Strategy and Operations. They explained that they can assist you and your company with guidance on subsidies, from A to Z.1 In this context, we would like to discuss the tax framework for subsidies: how are awarded subsidies treated tax-wise within companies? Are these subsidies exempt from corporation tax and, if
Right to deduct VAT possible for costs incurred during the purchase of shares
The Ryanair ruling
Right to deduct VAT also possible for costs incurred during the purchase of shares, if the purchase ultimately does not (fully) go ahead The European Court of Justice recently confirmed that VAT on costs incurred during the purchase of shares may be deductible even if the purchase ultimately does not (fully) go ahead. As such, the Court of Justice has upheld the principle that the preparatory t
What are the options?
The deduction for investment: an illustration of the options
The deduction for investment allows companies and natural persons who earn profits or benefits to reduce their taxable profits by placing part of the acquisition or investment value of investments in new tangible and intangible fixed assets. Depending on the size of your business and the nature of your activities, you can generally apply the regular, one-off deduction for investment of 20% (tem
Valuation of usufruct
Now also a witch hunt when usufruct is sold?
In previous editions, we have already written about the valuation of usufruct when purchasing property, but recently there have also been regular reports of checks on the valuation of usufruct when reselling. However, up until now, the case law has followed the viewpoint of the taxpayer. Brief description For several years, there has been a lot of controversy regarding the valuation of usufruc
Vlabel is using conciliatory language
Has the decrease in Flemish sales duty led to an increase in the costs for purchases of usufruct?
The decrease in sales duty: also for split purchase usufruct-bare ownership The recent drop in the rate (to 7.00%) for purchases of family homes comes with a number of conditions. For example, the purchaser must be a natural person. Following some uncertainty, it was subsequently confirmed that, in the event of a split purchase of such a property by a company for the usufruct and the bare owner f
The labour market of the future
Earn (on the side) flexibly and untaxed
There are three legal social statuses in Belgium, (i) employee, (ii) self-employed and (iii) civil servant. However, the question is often asked whether these classifications are still relevant to the rapidly evolving labour market in which flexibility is key and many people opt for a 'freelance status' or wish to combine several statuses. Voka has already called for a debate on the labour mark
Is there a notification requirement for your organisation?
Well begun is half done: Prepare your organisation for the go-live of the UBO register.
The register of ultimate beneficiaries (the "UBO register") will go live on 31 October 2018. In one of our previous newsletters we presented an overview of the general framework of the UBO register. The Royal Decree of 30 July 2018, published in the Belgian Official Journal of 14 September 2018, explains this register in detail. We’ve reviewed what your organisation needs to take into account.&n
One of the action points of the ATAD Directive
Impact of the implementation of the Belgian CFC legislation: the de facto tightening of transfer pricing rules?
From 1 January 2019 (fiscal year 2020), the newly introduced CFC rule will come into effect in Belgium, due to the implementation of the ATAD directive1. This new legislation must be interpreted within the broader framework of the Summer Agreement and the reforms within Belgian corporate taxation, which, like the CFC legislation, have resulted in part from the heavily discussed implementation of t
Brexit, e-commerce & VAT action plan are discussed
Pending changes in the area of international VAT
In the previous edition we discussed the expected changes in terms of VAT at a national level. In this article we will briefly consider the VAT changes that are expected internationally.                Brexit  In principle, on 30 March 2019, the ‘Brexit’ will finally be a reality. The United Kingdom will no lon

Subscribe to our newsletter