Legislative amendment for payments to tax havens

Threshold

Until now, a Belgian company was only required to make a specific declaration of its payments to tax havens if these payments exceeded €100,000 during the tax period. The legislator has now added that these payments must be increased with the increase in debts to the said persons or permanent establishments determined during the tax period.

Example

As a result of the use of an intangible asset in the financial year 2023, a Belgian company owes €180,000 to a company resident in a tax haven.

The debt will be paid in two instalments: the first instalment of €90,000 will be paid in 2023 and the second instalment of €90,000 will be paid in February 2024.

Under the old legislation, the payment does not have to be declared as it does not exceed the €100,000 limit during the tax period.

From the assessment year 2024, the payment must be increased with the established debt, 90,000 + 90,000 = 180,000 euros. This will cause the limit of 100,000 euros to be exceeded during the tax period.

Obligatory declaration

Belgian companies that exceed the €100,000 threshold must attach a special form 275 F to their corporate tax return. This form lists all payments to persons domiciled in a tax haven.

Payments to tax havens are only deductible for corporation tax purposes if they are declared on form 275 F and the taxpayer can prove that they are actual and genuine transactions.

Tax haven

A country is considered a tax haven if it:

• Has been identified by the Global Forum as a state that does not effectively or substantially apply the standard on exchange of information on request, this is the so-called OECD list;

• Appears on the list of States with no or low taxation;

• Appears on the EU list of non-cooperative jurisdictions.

Antigua and Barbuda, Belize and Seychelles have been added to the latter list since 23 October 2023. In turn, the British Virgin Islands, Costa Rica and the Marshall Islands were removed from the list.

Through this link you can consult a worksheet in which the Belgian administration has listed all tax havens.