Services other than the prohibited non-audit services are, in principle, permitted. However, for some companies, the total fee for non-audit services cannot exceed the total of audit fees (“1 to 1 rule”). This rule is applicable only for:
- Belgian public quoted companies
- Belgian companies which are legally required to prepare and publish consolidated financial statements, or are part of such companies (irrespective of whether they are foreign or Belgian affiliates).
Every time the statutory auditor, or any person or entity affiliated to the statutory auditor, plans to deliver any of these services, the assessment of the 1 to 1 rule has to be made on a consolidated basis at the level of the publicly quoted, audited Belgian parent or consolidated Belgian audited group.
When a single Belgian entity (i.e. with no subsidiaries) has to comply with the 1 to 1 rule because it is a subsidiary of a foreign group, the 1 to 1 rule is assessed at that single Belgian entity.
The 1 to 1 assessment should be performed on an accounting year basis, before and after the actual performance of the services. All services performed in an accounting year should be included in the 1 to 1 assessment of that relevant accounting year. (Invoice or payment dates are not relevant.
Not included in the assessment of the 1 to 1 rule are:
- Fees from services related to the acquisition due diligence for the first acquisition of a company by the audited company or one of her subsidiaries;
- Fees from services which are reserved to the statutory auditor by law (the so-called “legal missions”, such as mergers, contribution in kind, etc).
The 1 to 1 rule does not need to be respected in the following three cases:
- In the case that the audit is performed jointly with another statutory auditor (i.e. from a different network). This exception only applies to entities which are not obliged by law to establish an audit committee (non-Public Interest Entities / non-PIEs);
- When the formally established statutory audit committee of the audited Belgian company or its parent (in Belgium, the EU or other countries which are members of the OECD), pre-approves a derogation to the 1 to 1 rule.
Note that the Belgian audit committee needs to comply with certain specific rules on its composition if the entity is obliged by law to establish an audit committee (PIEs).
- If the statutory auditor obtains a pre-approval from the Belgian regulatory “Advice and Control Committee” (ACCOM). This committee was established to interpret the independence rules and supervise compliance with these rules.