In recent years, it's become an annual expectation for the transfer pricing audit department (TP Cell) within the Belgian Tax Authorities (BTA) to start the new year with the launch of a round of transfer pricing audits, by way of sending transfer pricing related requests for information ("Vraag om inlichtingen" in Dutch and "Demande de renseignements" in French) to a number of Belgian taxpayers.

A few note-worthy observations and trends from Belgian transfer pricing audits in recent years include:

  • An increasing shift towards the use of tailored questionnaires as opposed to standardized questionnaires, and broadened scope of audits;
  • Information gathering based on Country-by-Country Reports (CbCR);
  • A continuing (envisaged) increase in the capacity of the BTA to perform transfer pricing audits; and
  • Increased assertiveness of the BTA.

Increased use of tailored questionnaires and broadened scope of audits

The typical transfer pricing request for information shared by the BTA often takes the form of a standardized questionnaire, comprising of over 30 questions covering the company’s overall business, controlled transactions, functions, risks, and assets – as well as a request for any existing transfer pricing studies. In recent audits, certain taxpayers have received questionnaires tailored to the specifics of their company, as well as containing questions focusing on various transfer pricing topics of particular interest (e.g. intercompany financing, acquisitions, restructurings, etc.).

While the tailored questionnaire had in the past been primarily used for certain large-sized multinationals, we've noticed that this approach has been more widely adopted in the wave of 2022 audits. Taxpayers may also be informed of the transfer pricing audits without an accompanying questionnaire, which is then followed by a tailored questionnaire.

This shift towards more taxpayer specific questionnaires may be attributed to the BTA’s capacities to first review the information filed annually by taxpayers through the Master File and Local File forms.

Furthermore, we see more short questionnaires (one pagers) being sent out, where the transfer pricing auditors are directly inviting themselves for a meeting, and where no upfront written response is required yet. In addition, the scope of certain transfer pricing audits has also shifted from an audit on an individual Belgian entity, towards an audit of several (or all) of the Group entities located in Belgium. In the past, transfer pricing audits would predominantly focus on a specific Belgian entity of a multinational enterprise group (MNE Group), rather than on the position of more than one entity at a time.

It's also further anticipated that transfer pricing audits driven by the Directive on Administrative Cooperation (DAC) 6 reported arrangements are likely to be initiated in the near future, considering the first filings were made by taxpayers in February 2021.

As has been the case, responses to the request for information have to be provided within 30 days upon receipt (in certain cases, extensions may be granted). Incomplete or delayed responses can result in an ex officio tax assessment. The possibility to request a pre-audit meeting remains, and can be requested within 10 days upon receipt of the questionnaire.

Information gathering based on CbCRs

While the CbCR requirement was introduced in Belgium for financial years beginning 1 January 2016, it has only been since the end of 2021 that the BTA has started initiating meetings with certain taxpayers to discuss and gather further information on submitted CbCRs. These meetings aim at discussing discrepancies across a Group’s CbCRs filed over the years – helping the BTA to identify potential transfer pricing risk areas.  This may see the start of CbCR-led audits in Belgium.

The BTA has also mentioned that errors in previous CbCRs filed would warrant a re-filing to replace the previous CbCR filed – instead of filing a new or additional CbCR.  Keep in mind that if an erroneous CbCR remains in the tax authorities’ system, the BTA may continue to consult and review the CbCR which the taxpayer may intend to replace.

Increase in capacity to perform more transfer pricing audits

Also continuing in 2022 is the (envisaged) reinforcement of TP Cell personnel with the recruitment of both fresh graduates and experienced transfer pricing professionals.

The headcount of the TP Cell has already increased significantly over the past few years, and this growth is expected to continue – increasing the capacity of the team to conduct even more transfer pricing audits. The number of transfer pricing inspectors has nearly doubled over the past five years, and a further significant increase in resources has recently been announced by the Minister of Finance.

The increased capacity for transfer pricing audits is not only a result of an expansion of the TP Cell, but also stems from the cooperation with the Large Companies Department of the BTA; whose members have been trained in transfer pricing. Additionally, the Special Investigation Squad ("Bijzondere Belastingsinspectie - BBI" in Dutch and "Inspection Spéciale des Impôts – ISI" in French) has also been focusing more on transfer pricing issues by coordinating and liaising with the TP Cell.

Increased assertiveness of the BTA

Where in the past transfer pricing audits were in most cases settled based on negotiations, we've noticed that more and more transfer pricing audits tend to close without a settlement, which is an indication of the increased assertiveness of the Belgian tax authorities.

Following a non-agreement between the BTA and the taxpayer, a notification of change ("Bericht van Wijziging" in Dutch and "Avis de Rectification" in French) will be sent. The taxpayer has one month to reply to this notification of change, starting from three working days after the sending date of the notice. If the BTA does not agree with the arguments brought forward by the taxpayer, a taxation decision ("Kennisgeving van Beslissing tot Taxatie" in Dutch and "Notification de la décision de taxation" in French) will be sent. Upon receiving the corresponding assessment note, the taxpayer has the right to invoke an administrative appeal within 6 months and 3 working days after the sending date of said assessment note. Again, the BTA (in the capacity of the appeal handling officer) will have to decide on the merits of the protest letter filed by the taxpayer. While there is no deadline for this decision to be taken (of course within the boundaries of the principles of good administration), the taxpayer can bring their case to court if no decision has been taken after six months.

As a result of the increased assertiveness of the BTA, it is expected that more transfer pricing audits will ultimately end up before court. Also, more and more cases will end up in a procedure for relief of double taxation. As the amounts at stake increase significantly and the assertiveness of the Belgian transfer pricing inspectors rise, it is to be expected that the mutual agreement procedures (as foreseen in the double tax treaties and the European Arbitration Convention) will be activated more frequently. As such, the civil servants of the International Department of the Belgian tax authorities (the so-called Belgian competent authorities) will see their workload increase significantly in the years to come.


With the increasing trend in transfer pricing audits in Belgium, multinationals operating in Belgium should be well-prepared ahead of these audits to be able to shift the burden of proof on the inspectors in the event of an audit.  This entails having a sound transfer pricing policy in place, implemented consistently, and supported by the necessary transfer pricing documentation and analyses.

Should a taxpayer be selected for an audit, a clear strategy should be considered when responding to the information requests. Requesting a pre-audit meeting is often recommended to potentially frame the boundaries of the transfer pricing audit from the beginning, and to establish an understanding with the inspectors.

With these developments and an increasing number of focus areas in the tax landscape, it's vital that Belgian taxpayers are kept abreast to anticipate and fully understand the underlying requests when a transfer pricing audit is launched.


Authors: Dirk Van Stappen, Partner Corporate Tax, Yves de Groote, Partner Corporate Tax and Andres Delanoy, Partner Corporate Tax.