Changes to the Belgian Law on Minimum Taxation (Pillar Two/GloBE)

A draft law modifying the Belgian Law on minimum taxation is submitted to the Belgian Parliament (hereafter: the proposal). The proposal codifies important procedural aspects of the minimum taxation, incl. the assessment system and the concept of general representative, as elaborated below. Some of these changes are especially important in the light of the quickly approaching first deadline of the Domestic Minimum Top-up Tax (DMTT) compliance in November 2025. 

The proposal includes the following changes:

1. Electronic platform: All (official) communications concerning the minimum taxation will be served and exchanged through the designated and secured electronic platform of the Belgian Tax Administration (i.e., FPS Finance).

2. Definition “group”: The current definition follows the one in the EU Directive which, however, allows different interpretations to the qualification of joint ventures (i.e., whether these qualify as constituent entities (CEs)). Based on the proposal, the current definition will be aligned with the one in the OECD GloBE Model to clearly reflect the criteria of consolidation of assets, liabilities, expenses and cash flows. As a result of the new wording, a joint venture (JV) will not qualify as a CE.

3. Definition “filing constituent entity”: The definition will be adjusted to also cover the obligations for filing the DMTT-return and a simplified GIR/TTIR in Belgium (hereafter referred to as GIR-light return(s)).

4. DMTT liability: The proposal specifies that the entities subject to the Belgian DMTT are the Belgian CEs, joint ventures and joint venture subsidiaries. Furthermore, for the purposes of the DMTT, joint ventures and joint venture subsidiaries are presumed to be constituent entities.

5. Codification of the assessment system:

a.       The proposal codifies the assessment system for Top-up Taxes (i.e., DMTT, IIR, UTPR) in Belgium. Accordingly, the Belgian Tax Administration will determine the tax due for the DMTT, IIR and UTPR in different assessment notices. An assessment notice will not be issued earlier than 6 months starting from the receipt of the relevant tax returns by the Belgian Tax Administration.

b.       The proposal also determines that the assessment year is the fiscal year unless the fiscal year ends on 31 December. In the latter case, the assessment year is the year following the fiscal year.

c.       When an MNE group has more than one entity in Belgium which is in scope of the DMTT or UTPR, the tax due will be determined via a “joint assessment notice” for all Belgian entities (i.e., separately for the DMTT and the UTPR).

d.       The GloBE Information Return (GIR) will no longer qualify as a tax return and therefore will not trigger an assessment notice. Instead, the DMTT-return and the GIR-light return(s) qualify as tax returns and trigger the issuance of an assessment notice by the Belgian Tax Administration. The requirement for the GIR-light return(s) was implemented in Belgium to enable a timely issuance of the assessment notice(s) by the Belgian Tax Administration (see: Belgian Law on minimum taxation amended - KPMG Belgium ).

6. General representative: The proposal introduces the concept of a general representative for the purposes of the DMTT and the UTPR for the cases when an MNE group has more than one entity in Belgium. This general representative takes the role of a filing CE, a designated filing entity and a designated local entity. It acts in its own name as well as in the name of all CEs, joint ventures and joint venture subsidiaries subject to the DMTT or the UTPR in order to assume all obligations and exercise any rights provided by the Belgian Law on Minimum Taxation.

A general representative is one of the Belgian entities of the MNE group, as designated by the other MNE-group entities and notified to the Belgian Tax Administration. To enable an effective application of this rule, two presumptions apply. If there is no such notification, the entity which actually filed a Top-up Tax (TuT) return or the GIR/TTIR is presumed to be the general representative. Furthermore, if there is no such designation, a cascading rule determines which entity is presumed to be the general representative.

7. Statute of limitations: The statute of limitations for the DMTT and the jurisdictional TuT (i.e., IIR and UTPR) will be 6 years. Currently, this period is 10 years.

8. Joint & several liability: Currently, joint and several liability applies to Belgian CEs for the payment of the DMTT and the UTPR TuT. For the purposes of the DMTT, the proposal extends this liability also to joint ventures and joint venture subsidiaries. 

The Belgian DMTT is qualified based on the OECD’s central record (i.e., QDMTT). However, the deadline for submitting the QDMTT return is much earlier than in other countries, i.e., 11 months following the fiscal year (see also Belgian DMTT-return template - KPMG Belgium ). While this deadline is quickly approaching, the Belgian Tax Administration has not yet provided details and instruction concerning the technicalities of the filing. More information is expected shortly. 

The changes to procedural rules imply some further administrative complexities which are specific to Belgium and partly deviate from the international rules for the administration of Pillar Two/GloBE. Therefore, it is recommendable for each MNE-group which is in scope of the Belgian Law on minimum taxation to understand the compliance requirements.

If you have questions about the new rules and their implications to your business, or you need other assistance with the Belgian minimum taxation, do not hesitate to reach out to your trusted KPMG advisor or contact us.

KPMG can assist you with all compliance aspects of the Pillar 2/GloBE minimum taxation in Belgium and worldwide, including registration, calculation of tax liabilities and filing of the required returns. Additionally, we can also help you to identify the relevant data points, gather the required data and perform the calculations for both the DMTT and jurisdictional Top-up Tax liabilities (i.e., IIR and UTPR).