Automatic exchange of information

The Belgian Tax Authorities have an established practice of automatic information exchange with other jurisdictions. In 2023, the total number of such exchanges was around 5,5 million[1] and concerned different types of income (e.g., wages, director’s fees, interest), CbC reports, rulings and advance pricing agreements, and reportable cross-border arrangements. 

The practice of automatic information exchange is based on the transposed rules of the EU Directive 2011/16/EU on Administrative Cooperation (“DAC”) in the field of taxation. This directive was subject to various amendments over the years and also introduced reporting requirements for certain types of businesses. The most recent measure is the reporting obligation of platform operators under DAC7. For more information, see Belgian FAQ on DAC7 - KPMG Belgium. The next upcoming measure imposes reporting obligations on crypto-asset service providers under DAC8 and is to be transposed into Belgian national legislation by the end of 2025. Finally, the European Commission proposed DAC9 in October 2024, which will facilitate a central filing of Top-up Tax Information Returns under Pillar 2/GloBE by MNEs within the EU.  

The Belgian federal government in current affairs has recently proposed a draft law on various tax provisions which also contains changes to the current rules on exchange of information and related obligations. The changes are expected to be adopted before the end of this year and cover the following aspects:

• DAC7: In the context of DAC7, a reporting platform operator will be required to notify each involved natural person about the fact that it will gather and report their relevant data. Additionally, it will have to share the relevant data with each reportable seller by 10 January following the reporting period (i.e., instead of 31 January). The aim is to give the seller the opportunity to comment on the reportable data before the reporting deadline of the platform operator. Also, the retention period for data of excluded sellers will be increased to ten years (from three years) to align it with the general retention period of other reportable data. Finally, the new rules will introduce guarantee requirements for platform operators whose registration is revoked in Belgium or in another Member State.
• Penalties under DAC6 and DAC7: The penalty regime for DAC6 and DAC7 will be modified to also accommodate for situations where non-compliance is “independent of will”. The new rules will state that a penalty “can” be levied, which implies that it does not have to be levied under circumstances when non-compliance is independent of will.
• Protection of personal data: For the purposes of information exchange under DAC in general, the new rules will specify the responsibilities of the Belgian competent authorities regarding any breach to data security, including the obligation to notify the European Commission of such breach, the possibility to suspend the exchange of information, and the investigation and resolution of the data breach. In the context of these rules, reporting financial institutions, intermediaries, reporting platform operators and the Belgian competent authority are considered controllers.  They are considered controllers when they, alone or jointly, determine the purposes and means of the processing of personal data within the meaning of Regulation (EU) 2016/679 of 27 April 2016 on the protection of natural persons with regard to the processing of personal data and on the free movement of such data (i.e., General Data Protection Regulation - GDPR).

DAC7 and DAC8 introduce reporting and due diligence requirements for platform operators and crypto-asset service providers, respectively. The scope of application of these rules is quite broad and may also affect businesses that generally would not consider themselves covered. Therefore, we advise businesses with any related activities to perform a scoping analysis and, accordingly, implement adequate governance and compliance measures.

If you have questions about whether you may be affected by any of the current or future reporting obligations, or need help ensuring your compliance, we can assist you with expert knowledge as well as effective and efficient technological solutions. Do not hesitate to reach out to your trusted KPMG advisor.