Qualifying Belgian group entities which are member of an international group should take into account the upcoming deadline of 31st December 2018 for electronic filing of the Belgian Master File form ‘275MF’ as well as the Country-by-country reporting (275 CBC NOT and/or 275 CBC).
Qualifying group entity Master file
A qualifying Belgian group entity (legal entity, branch or taxable permanent establishment) of an international group is subject to mandatory filing of a Master File (form 275 MF) and Local File (form 275 LF), if one of following criteria is exceeded in its statutory financial accounts (on a ‘stand alone’ basis) in the prior financial year:
- Gross operating and financial income exceeding 50 million euro (excluding non-recurring items)
- Average annual number of employees of 100 in full time equivalents (‘FTEs’)
- Balance sheet total exceeding 1 billion euro
The Master File (form 275 MF) contains an overview of the multinational group, including the nature of its business operations, transfer pricing policy, intangible assets, intercompany financial activities, consolidated financial and tax position of the group.
The Master file form 275MF is in line with OECD requirements and demands an overview of the multinational group, including:
- Organizational structure: chart illustrating the legal and ownership structure as well as the geographical location of all operating entities.
- Nature of its business operations: amongst others a description of the supply chain for the group’s five largest products and/ or service offerings by turnover, a list of important intragroup service arrangements, important business restructurings, as well as a brief written functional analysis describing the principal contributions to value creation by individual entities within the group.
- Intangibles: strategy for the development, ownership and exploitation of intangibles, list of intangibles, transfer pricing policy with respect to R&D, etc.
- Intercompany financial activities: description of how the group is financed, including important financing arrangements with unrelated lenders, identification of central financing function within the group, transfer pricing policy with respect to financing arrangements such as setting an arm’s length interest rate.
- Consolidated financial and tax position of the group: FY2017 consolidated financial accounts as well as a list of advance tax rulings.
Qualifying group entity CBC reporting
In addition, Belgian group entities that are part of a multinational group with a consolidated gross revenue of 750 million euro or more have to meet specific Country-by-Country (‘CbC’) notification and/or reporting requirements. Amongst others, a notification form 275 CBC NOT has to be filed with the Belgian tax authorities identifying the (ultimate) parent entity that will comply with CbC reporting.
Legal filing due date
The Master File form should be filed within a period of 12 months following the last day of the group reporting period. For the financial year ending on 31 December 2017, the due date has therefore been set on 31st December 2018.
The annual CbC reporting notification form (275 CBC NOT) will have to be filed at the latest by 31st December 2018, with respect to the financial year ending on 31st December 2018.
All transfer pricing ‘BEPS13’ documents should be filed electronically via the MyMinfinPro-website of the Belgian tax authorities (in an XML format). Appendices have to be filed in a searchable PDF format.