New requirements for transfer pricing documentation in Belgium from 2025

This article discusses which businesses are subject to these documentation requirements and highlights the changes that have been introduced to help your business prepare effectively.

Which companies are subject to the documentation requirements?

A previous article explained which companies are required to submit a Local File and a Master File.

• The Local File consists of a general section and a detailed section (Detailed Local File). The Detailed Local File is only required if at least one business unit within the Belgian group entity exceeds the threshold of €1 million in cross-border transactions with group entities.

• The obligation to file a CbCR applies to multinational groups with a consolidated gross turnover of more than €750 million.

• If Belgian entities are part of a multinational group that files a CbCR in another country, all Belgian entities must file a notification form identifying the reporting entity.

What changes are being made to the forms?

On 15 July 2024, three Royal Decrees were published in the Belgian Official Gazette, introducing changes to the forms for the Master File, the Local File, and the CbCR notification. Below is an overview of the changes by form.

Changes to the Master File

While the declaration form itself remains unchanged, clarifications have been made to the explanatory notes:

• Section II: A more detailed description of the analytical framework for the value chain and the functional analysis of the group must be included.

• Section III: A detailed analysis of the DEMPE functions (Development, Enhancement, Maintenance, Protection, Exploitation) related to intangible assets must be provided.

• Section III: Specific information on used or transferred hard-to-value intangible assets must be included.

• Section IV: A minimum standard is now imposed for the information to be provided on the group’s general transfer pricing policy with respect to financing arrangements.

Changes to the Local File

The Local File has undergone minor adjustments in terms of content (introduction of the "Tax Identification Number"), but the main changes are again to be found in the explanatory notes. In particular, the Detailed Local File requires more comprehensive information:

• Cross-border transactions, previously reported per business unit, must now also be broken down by country.

• Transfer pricing methods, studies, and framework agreements must be attached as PDF files. Previously, it was sufficient to mention them in the form.

• For cost contribution agreements, advance pricing agreements (APAs), and internal (re)insurance arrangements, the country code and tax identification number must be provided.

Changes to the CbCR Notification Form

The CbCR notification form has been updated with one addition: companies must now indicate the type of notification — whether it is a first notification, a modification of a previous notification, or a termination of the obligation.

Timely preparation

The Belgian tax authorities are conducting stricter audits of the data included in transfer pricing documentation. It is therefore crucial to prepare for the new forms well in advance, as they will apply to fiscal years beginning on or after 1 January 2025.