Belgian Reporting Obligation for Payments to Tax Havens: OECD’s “Partially Compliant” Jurisdictions Now in Scope

February 17, 2022 | Blog

Belgian companies and permanent establishments making direct or indirect payments to recipients established in countries and territories known as “tax havens” must report payments exceeding EUR 100,000 per taxable period in an annex (275 F) to their Belgian (resident or non-resident) corporate income tax (“CIT”) return.

Under the principles set forth in the Belgian Income Tax Code (“BITC”), jurisdictions qualify as “tax havens” if they appear on one of the following lists (BITC, Article 307, Section 1/2):

  • The Belgian blacklist of countries with zero or low taxation (mentioned in Article 179 of the Royal Decree implementing the BITC);
  • The European blacklist of non-cooperative jurisdictions; and
  • The OECD’s Global Forum on Transparency and Exchange of Information for Tax Purposes list (which includes countries that are “non-compliant” with the minimum OECD standards regarding the exchange of information on request (EOIR or transparency standard)).

So far, the OECD’s list was limited to jurisdictions having received a “non-compliant” rating from the Global Forum on Transparency and Exchange of Information in Tax Matters. This position was confirmed in a Circular Letter of 30 November 2010 and a Parliamentary Question of 2014.

However, on 20 December 2021, the Belgian Revenue Service published a new Circular Letter 2021/C/112 (available in French or Dutch) mentioning that “partially compliant” jurisdictions now also fall within the scope of the OECD’s list. This position was recently confirmed by the Minister of Finance in his reply to a Parliamentary Question asked by Mr. Matheï on 30 June 2021.

Hence, effective 1 January 2021, payments made to “partially compliant” jurisdictions (i.e., Turkey, Malta, Panama, Barbados, Botswana, Dominica, Ghana, Kazakhstan, Liberia, the Seychelles, Saint Martin and Vanuatu) will also be targeted by the reporting obligation.

Note that non-compliance with the reporting obligation leads, in principle, to the non-deductibility of the payments made (Article 198, Section 1, 10°, BITC). However, if Belgium and the “tax haven” jurisdiction concluded a Bilateral Tax Treaty including a non-discrimination or exchange of information clause, the deductibility remains applicable.

Each year, the Belgian Revenue Service publishes an Excel sheet with the jurisdictions contained in each of the three lists (available in French and in Dutch). It also includes the jurisdictions qualifying as “tax havens” with which Belgium has a Bilateral Tax Treaty including a non-discrimination or exchange of information clause.

For more information, please contact Werner Heyvaert or Vicky Sheikh Mohammad.

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