a) Which transactions must be documented (all transactions with associated enterprises, or only those which exceed a particular threshold)?
All transactions with associated companies have to be documented and their price must be justified at all times.
b) What is the definition of “associated enterprises” for the purposes of this requirement?
In accordance with the Belgian company code, “associated companies” are:
- (A) any company which has control of another (based on share ownership, voting power, power to appoint the majority of the members of board),
- (B) any company which is controlled by another,
- (C) companies which are part of a consortium,
- (D) other companies which are controlled by the companies mentioned above on (A), (B) and (C).
c) For EU countries, is the content of the documentation similar to that described in the EU Code of Conduct on transfer pricing documentation for associated enterprises (“EU TPD”)? If not, are taxpayers entitled to choose between the local requirements and the EU TPD?
The tax authorities have published a circular relating to transfer pricing documentation which transposes the content of EUTPD. However, this circular also states that the European documentation is only a minimum requirement for companies and does not prevent complementary information being requested (depending on the facts and the circumstances). This might be:
- information concerning the company (activities, structure, shareholding, sales, turnover, and transactions with associated companies …),
- information concerning the transactions (market, conditions, circumstances, framework …),
- information concerning the functions of the company (production, marketing, advertising, transport, management …),
- information concerning the risks (financial, loan conditions, liability, and change in prices …),
- information concerning the assets (tangible or intangible).
d) Do taxpayers which are not established in your jurisdiction need to undertake to provide any specific information upon request? Can your tax authorities require the taxpayer in your jurisdiction to provide information which is located in another state?
The Belgian tax authorities may request information only from Belgian taxpayers. Such requested information could include information which comes from another State.
Regarding taxpayers which are not established in Belgium, the Belgian tax authorities could request assistance from the tax authorities of the foreign jurisdiction in obtaining information.
e) If comparable studies are to be provided, do the tax authorities generally accept regional benchmark studies (e.g. pan-European benchmark studies)?
In practice, regional benchmark studies and in particular pan-European benchmark studies are generally accepted by the Belgian tax authorities.
f) What language(s) are to be used by taxpayers in submitting the transfer pricing documentation?
The languages which are used in Belgium are French, Dutch or German depending on the location of the registered seat / establishment of the company.
However, given the international aspects of the transfer pricing issues, the Belgian tax authorities also accept transfer pricing documentation in English.