Belgium: Amendments to Pillar Two global minimum tax rules
The Belgian Parliament adopted amendments to the Pillar Two global minimum tax rules that were adopted in December 2023.
May 3, 2024
The Belgian Parliament adopted amendments to the Pillar Two global minimum tax rules that were adopted in December 2023.
The amendments, which generally apply to fiscal years starting from 31 December 2023, include the provisions below.
Compliance
- Create a legal basis for registration of in-scope groups in the Belgian commercial register which are required to get a unique registration number for compliance purposes in Belgium
- Introduce the requirement to file an additional form about the amount of income inclusion rule (IIR) and undertaxed payment rule (UTPR)
GloBE computation
- Modify the definition of qualified refundable tax credit to incorporate the definition of marketable transferable tax credits
- Introduce the election to include in the GloBE income and loss all dividends received from portfolio shareholdings (<10%) regardless of the holding period
- Introduce a restriction to the deductibility of the domestic minimum top-up tax (DMTT) from the jurisdictional top-up tax
- Provide that the rule on the exclusion of deferred taxes with respect to tax credits does not apply in the case of substitute loss carry-forward deferred tax assets
- Modify the definition of the amount of adjusted covered domestic taxes
- Introduce a transitional rule for blended controlled foreign corporation (CFC) regimes (e.g., GILTI)
Safe harbors
- Introduce the qualified domestic minimum top-up tax (QDMTT) permanent safe harbor, as well as the permanent safe harbor for non-material constituent entities
- Introduce the transitional UTPR safe harbor, and incorporate the hybrid-arbitrage rules in the transitional country-by-country reporting safe harbors
Corrections
- Correct the charging provisions regarding partially owned parent entities (POPEs) to align the wording with the international rules
- Correct the definition of transition year, and the rule for the exclusion in the initial phase of international activity, to align the wording with international rules
Read a May 2024 report prepared by the KPMG member firm in Belgium