Belgium: Proposed amendments to anti-abuse rules

Parliament is currently considering new legislation concerning anti-abuse rules

Parliament is currently considering new legislation concerning anti-abuse rules

Parliament is currently considering new legislation that would limit the scope of two existing tax anti-abuse provisions:

  • Article 54 BITC authorizes the denial of deductibility of interest payments, patent use fees, manufacturing process fees, and service remuneration
  • Article 344, §2 BITC allows the tax authorities to reject the enforceability of transactions involving shares, bonds, debt claims, copyrights, patents, manufacturing processes, trademarks, or cash

The proposed legislation would limit the scope of these two articles to payments or transactions with nonresidents or foreign entities if:

  • There is a direct or indirect interdependent relationship, which can be economic, managerial, or structural
  • The nonresident or foreign entity is either not subject to income tax or the payments or transactions fall under a significantly favorable tax regime

The taxpayer, however, can avoid the anti-abuse rules in two ways:

  • If the actual tax is at least half of what would otherwise be due in Belgium
  • If the payments or transactions are authentic, meaning they are made for legitimate business reasons reflecting economic reality

The new rules are proposed to take effect from 1 January 2024.

Read a December 2023 report prepared by the KPMG member firm in Belgium


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