In July 2013 the OECD prepared a plan against aggressive tax planning and avoidance at an international level. After all, multinationals with branches in low-tax jurisdictions have an interest in declaring profits in those countries.

Transfer Pricing

The so-called Base Erosion and Profit Shifting plan (BEPS) details a 15 point Action Plan on the issue. It also contains a chapter on Transfer Pricing (the internally used transfer prices for services, goods or rights delivered between affiliated companies).

On October 5th, 2015, the OECD published its final plan including recommendations for tackling tax avoidance by multinationals.

The BEPS plan forces companies with international activities to provide more details, transparency and coherence. Thus the OECD aims at arriving at a standard interpretation of the international tax consequences of complex economic transactions.

Many countries already feel the impact of BEPS as transfer pricing plays an increasing role in tax audits and rulings.


Based on an OECD report published in September 2014, it was argued that companies should prepare transfer pricing documentation consisting of three parts:

1. The master File
The Master File contains standardised information about the group and its structure.

2. The Country-by-Country report
The Country-by-Country report (CbC) contains information about the group’s income, its business activities, taxes, etc. per tax jurisdiction. Multinationals will be forced to report this data on an annual basis.

The first CbC reports should be submitted for the fiscal years starting in January 2016. Groups are granted a one year submission deadline after closure of the fiscal year.

Only groups with a consolidated income of less than EUR 750 million will be exempt from delivering the annual CbC report.

The report should enable tax authorities to make an estimate of the problems relating to transfer pricing and the BEPS with respect to the multinationals involved. The plan also involves automatic exchange of reports between the respective tax authorities of the countries where the MNE has a presence.

3. The local file
The local file contains information on the material controlled transactions with a local entity.


Belgium is currently considering the introduction of the mandatory transfer documentation following the final BEPS action plan, provided that this will be done in a proportionate manner and that the rules concerning the burden of proof are clear. The Transfer Pricing unit will be reinforced for this purpose.

Implementation of the minimum standards concerning Transfer Pricing Documentation into our Belgian legislation is expected early 2016.