Belgium Tightens the Lens on BEPS 13 Compliance

The Belgian transfer pricing documentation requirements applicable for financial years starting on or after 1 January 2025 were expanded and further clarified through the Royal Decrees of 16 June 2024 and 7 December 2025. The Belgian tax authorities hosted a webinar on 7 September 2026, providing further practical guidance on the interpretation and application of the revised requirements.

The message from the Belgian tax authorities is clear: the focus is shifting beyond formal filing requirements towards a substantive assessment of the quality, consistency and credibility of transfer pricing documentation. The main expectation is that the Base Erosion and Profit Shifting action point 13 (BEPS 13) reporting and documentation – including the Country-by-Country Report (CbCR), CbCR Notification, Master File and Local File - collectively tell “one coherent story” about the group’s business activities, value creation and transfer pricing outcomes, and enable the necessary risk assessment by tax authorities. 

For multinational groups, this means that compliance is no longer limited to filing the required forms on time. Greater emphasis will be placed on whether the information reported across the different BEPS 13 documentation requirements is complete, consistent and aligned with the group’s economic reality. Inconsistencies between filings, gaps in the information provided or discrepancies with the group’s actual business activities may therefore attract greater scrutiny.

The Belgian tax authorities emphasized the increasing importance of accurate, complete and consistent CbCR data, including consistency across reporting years and jurisdictions and clear identification of data sources. Table 3 is expected to provide more structured information on accounting standards, data sources, exchange rates and the basis of the financial information used. A list of common CbCR errors has been available on the Belgian tax authorities’ website since May 2025.

On consolidation adjustments, the Belgian tax authorities current view is that taxpayers should not allocate / push down these adjustments to the entity level, and hence should be excluded from Table 1. Any explanations on these consolidation adjustments may be separately disclosed in Table 3. This reflects the Belgian tax authorities’ current position in the absence of any formal guidance from the Organization for Economic Cooperation and Development (OECD).

For surrogate CbCR filing, Belgian tax authorities will accept such filing only where a legally specified condition applies, including no CbCR obligation in the Ultimate Parent Entity (UPE) jurisdiction, no qualifying exchange agreement, or systematic failure. Administrative convenience alone is not sufficient.

Finally, dividends from constituent entities may be excluded from CbCR as currently permitted under existing rules / guidance. However, dividends received from entities that are not constituent entities cannot be excluded from the CbCR.

In the context of Pillar 2, taxpayers should ensure that CbCR data is consistent across years and jurisdictions. While the OECD's Pillar Two administrative guidance allows some flexibility in the choice of data sources, the Belgian tax authorities stressed that they expect a single, coherent and consistently applied data approach across jurisdictions and are critical of using different data sources in different jurisdictions without strong business justification and transparent explanations - which might leave room for interpretation by taxpayers having to be compliant with the Action 13 CbCR requirements while also fulfilling the Pillar 2 transitional safe harbour assessment. Also, the changes in accounting standards should stem from a legitimate business justification; for example, switching from Belgian GAAP^[1] to IFRS^[2] solely to obtain a more favourable CbCR Safe Harbour outcome would not be sufficient from the Belgian tax authorities’ point of view. How top-up taxes should be reported in the CbCR is still being discussed at OECD level. However, as a practical approach, the Belgian tax authorities suggested providing information on top-up taxes in Table 3 including an explanation of how the amounts have been treated in Table 1.

The Belgian tax authorities provided further clarification on the revised CbCR notification requirements, including the following:

• The revised CbCR notification form now provides three options: first notification, modification of a previous notification, and termination of the notification obligation.
• The notification should reflect the group’s reporting period, rather than the reporting period of the individual constituent entity.
• Where the group’s reporting period was incorrectly reported or subsequently changes, a corrected notification should be submitted.
• A modification notification should be used where the constituent entity remains part of the same Multinational enterprise (MNE) group and remains subject to the CbCR reporting obligation, but where another change has occurred. It should not be used for a change in group or liquidation.
• In the event of a change in group following a restructuring or acquisition leading to a change in ultimate parent entity, a termination notification for the previous group should be submitted, followed by a new first notification for the new group. In the case of liquidation, the CbCR notification obligation does not automatically terminate following the publication of the liquidation in the Crossroads Bank for Enterprises. A separate termination notification is required.
• Where a group exceeds the CbCR threshold and then falls below the threshold in the following year, each change in status requires a notification i.e., a termination notification when the group falls below the thresholds and a new first notification when the group exceeds the thresholds. For Financial Year 2025 (FY2025), only a first notification is required, as the termination procedure was not yet available for earlier years.

Looking ahead, the authorities noted a potential European Union (EU) initiative to streamline CbCR and Pillar Two notification procedures, potentially through a common notification and EU template.

The Master File remains a group-wide document, not a Belgian entity-level analysis. Groups should assess whether their existing documentation addresses the Belgian tax authorities’ expectations on Value Chain analysis (VCA), Development, Enhancement, Maintenance, Protection and Exploitation (DEMPE), Hard-to-Value Intangibles and financial transactions. Where needed, a Belgian annex may supplement the Master File, while retaining a group-wide perspective.

VCA is a key area of focus, aimed at identifying where value is created, which group entities perform the relevant functions, the assets and risks involved, and assessing how these value drivers contribute to profit generation and are reflected in the transfer pricing model. The analysis should be performed at the multinational group level, with particular focus on significant non-routine activities and value drivers, including those performed outside Belgium. The VCA should link functions, assets and risks → value creation → profit allocation → transfer pricing policy (4 step approach), with quantitative information generally provided at group/category level rather than through entity-by-entity reconciliations. The Belgian tax authorities’ view is that resulting profit allocation should be assessed (e.g., using the Group’s consolidated financials) against the actual transfer pricing policy and remuneration; any misalignment should be explained. 

DEMPE functions are an increasing area of focus. Groups should identify significant intangibles and explain who performs and controls the Development, Enhancement, Maintenance, Protection and Exploitation activities, including outsourced functions. Legal ownership alone is not sufficient; remuneration should reflect the actual functions, risk control and value contribution. Where contractual arrangements differ from the facts, the transfer pricing analysis should follow the actual substance. A specific 6 steps approach should be followed for significant intangibles.

For Hard-to-Value Intangibles (HTVI), taxpayers should ensure that sufficient contemporaneous information is available to support the ex-ante pricing. This includes the description, key features, legal owner, relevant entities, reason for HTVI treatment, and the valuation / pricing approach and key assumptions. Ex-post outcomes do not need to be reported annually in the Master File but may remain relevant in a subsequent transfer pricing audit.

The Master File should explain the group’s transfer pricing policies for intercompany loans, treasury activities, cash-pooling arrangements, guarantees, trade receivables and payables, and captive insurance structures. The common expectation is that the policy, transfer pricing method, actual functions and risks, and financial outcomes form one consistent narrative. 

• Cash pooling: the cash-pool leader should be remunerated for the functions performed and risks controlled, but should not automatically retain all synergy benefits.
• Intercompany loans: similar loans should be priced under consistent principles, with material deviations appropriately explained.
• Guarantees: the analysis should identify the economic benefit for the borrower and explain how this benefit relates to the guarantee fee.
• ·Treasury and captive insurance: remuneration should reflect the activities actually performed and the risks effectively controlled or assumed.
• Trade receivables and payables: groups should explain when operating balances become financing transactions.

The actual group-level financial results should be aligned with the transfer pricing policy and value creation, with any material differences explained. The transfer pricing outcomes should reflect the actual conduct and economic substance, rather than contractual arrangements alone, in line with the “one coherent story” principle.

The Belgian tax authorities emphasized the need for transparent, coherent and accurate reporting across the Local File Form.

• Reporting structure (A4): Both employees and self-employed staff should be included, with no distinction between the two.
• Business units (A5/B): Business units should reflect the operational reality of the business and align with management reporting and transfer pricing policies. Where multiple transfer priciing policies apply to a business unit, this should be appropriately justified. Business unit names and numbers should be consistent across A5, A7 and Part B. Non-operational splitting merely for Local File Form reporting purposes is discouraged.
• Competitors and Tax Identification Number (TIN) (A6): Taxpayers should provide TIN(s) for relevant competitors. If TIN(s) cannot be obtained, a Legal Entity Identifier (LEI), European Unique Identifier (EUID), or another official local identification number may be used. “N/A” should only be used as a last resort where no suitable identifier is available. Blank fields or dummy values are not acceptable, and supporting evidence should be provided where a TIN is not available. Where no suitable Belgian competitor exists, the search may be extended to competitors in other jurisdictions, provided the selected entity remains representative of the competitive environment, or competitors of the group.
• Business restructurings (A7): Reporting should reflect the application of Chapter 9 of the OECD Transfer Pricing Guidelines, including relevant cross-border reorganizations.
• Part B – Cross-border transactions: Cross-border intercompany transactions exceeding EUR 1 million per business unit must be broken down by country. Groups should assess whether their enterprise resource planning (ERP) and reporting systems can capture the required detail and whether the reported amounts can be reconciled with the business-unit structure and transfer pricing documentation.
• TINs and supporting documents (B11/B12): Where a permanent establishment (PE) has no separate TIN, the head office TIN may be used. The TIN character limit has been increased to 32 characters. Relevant Advance Pricing Agreements (APAs), cost contribution agreements, rulings and internal insurance/reinsurance arrangements must be attached as readable PDFs in the first year of filing (was not an obligation in the past); subsequent filings can refer to the previously submitted document where it remains in force.
• Credit notes and special transactions: The treatment of negative amounts depends on the relevant section. Derivatives and other special products should be reported according to their economic nature, with the classification methodology explained where relevant.

Overall information reported across the Local File Form should be consistent with the group's transfer pricing policy, organisational structure and underlying transactions, reinforcing the broader “one coherent story” principle  

The Belgian tax authorities view BEPS 13 documentation as a transfer pricing risk assessment tool, with consistency across the CbCR, CbCR Notification, Master File and Local File becoming a key focus of compliance reviews and audits.

Data analytics and cross-checks may be used to identify:

• inconsistencies between the different BEPS 13 filings;
• missing or incomplete information;
• contradictory disclosures;
• insufficient support for reported transfer pricing outcomes; and
• results that are difficult to reconcile with the group’s reported value creation and business model.

Taxpayers remain responsible for correcting incomplete or inaccurate filings. While isolated and explainable errors may be treated differently from repeated or systematic deficiencies, good faith does not remove the obligation to provide complete information and correct identified errors. Incomplete filings may give rise to penalties.

Penalties are assessed across the BEPS 13 framework, rather than separately for each form. For example, any infringement relating to the Master File Form followed by any infringement relating to the Local File Form would be treated as a second infringement rather than as a new first infringement.

The updated filing system applies enhanced validation and consistency checks across filings. A “Valid” status indicates that the filing has passed the applicable validation checks, while an “Invalid” status indicates that errors or inconsistencies have been identified. Feedback letters will provide confirmation of the filing status and, where applicable, the errors detected as well. Where a filing is invalid, taxpayers should submit a corrected version as soon as possible rather than waiting until the filing deadline, as further validation may identify additional errors and could result in late filing. Filings correctly submitted under the old schema before 1 December 2025 remain valid and do not need to be resubmitted solely due to the new validation functionality.

• Review consistency: Reconcile the CbCR, CbCR Notification Form, Master File (Form) and Local File (Form) for consistent group, financial and transfer pricing information.
• Review CbCR: Confirm data sources, accounting frameworks and relevant Table 3 disclosures.
• CbC Notifications: Validate the reporting period, reporting entity and notification status (first notification, modification or termination). Assess whether restructurings, acquisitions, liquidations or changes in CbCR obligations require corrective filings.
• Assess the Master File: Review whether the group-wide documentation adequately covers VCA, DEMPE, HTVIs and financial transactions details as requested by the Belgian tax authorities. Ensure quantitative information supports the link between value creation, functions, risks and transfer pricing outcomes. An Appendix to the group Master File will likely be necessary to ensure compliance, as the Belgian requirements go beyond the OECD requirements.
• Prepare/review the Local File Forms: Validate business units, transaction data, competitor TIN(s) / identifiers and required supporting documents.
• File early: Allow sufficient time to address technical errors, inconsistencies and incomplete information before the deadline.

The guidance confirms that Belgian BEPS 13 compliance is becoming more stringent and increasingly focused on quality, consistency and compliance. The Belgian tax authorities expect the entire BEPS 13 package to tell one coherent story, with differences or inconsistencies across the filings appropriately explained.

Based on the wording of the Royal Decree, the additional content requirements for the Master File go beyond a purely OECD-based documentation approach in certain respects –  particularly through the emphasis on quantitative substantiation of value creation and transfer pricing outcomes.  Multinational groups should review their current Master File approach, and assess the balance to strike in sufficiently addressing the Belgian tax authorities’ intentions behind the additional content requirements, against the resource / time needed to provide the data and detail requested. It remains to be seen if the Belgian Master File requirements will set a precedence for tax authorities in more jurisdictions to start requesting a similar level of detail from multinational groups.

Similarly, the revised Local File Form introduces additional administrative requirements, such as competitor TIN(s) or alternative identifiers. Table 3 under CbCR also assumes greater importance in allowing a better understanding of the data and reporting framework underlying the CbCR.

Finally, the updated filing and validation processes reinforce this quality-focused approach. The Belgian tax authorities are applying stricter validation and consistency checks, with feedback letters identifying errors requiring correction. Early filing and timely correction will therefore be increasingly important to avoid incomplete or invalid filings and potential penalties.

KPMG can assist multinational groups in assessing their BEPS 13 framework approach against the requirements in the various jurisdictions they are located. Our support may include but not limited to:

• BEPS 13 and data consistency reviews across CbCR, CbCR Notification, Master File and Local File;
• Master File Report and Local File Form assessments against Belgian requirements, and preparation of a Master File Appendix to comply with the Belgian requirements;
• CbCR/Pillar Two data and governance reviews;
• Timely filing support and addressing validation errors; and
• Audit readiness and support for follow-up questions and transfer pricing audit.

This newsflash is for information purposes only and does not constitute legal advice.

_{[1] Generally Accepted Accounting Principles (GAAP)}

_{[2] International Financial Reporting Standards (IFRS)}