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Royal decree specifies information required under public CbC reporting rules

Corporate Tax Alert | Business Tax Alert

On 6 June 2024, the Belgian government published the royal decree of 18 April 2024 (Dutch | French), amending the royal decree of 29 April 2019 concerning the implementation of the Belgian Code for Companies and Associations (BCCA). The latter decree aims to partially transpose Directive (EU) 2021/2101 of the European Parliament and of the Council (“the EU directive”) relating to the public disclosure of income tax information by certain undertakings and branches—commonly referred to as public country-by-country (CbC) reporting—and specifically relates to the content and form of the information that companies must prepare and disclose for public CbC reporting purposes.

The EU directive amends Directive 2013/34/EU of the European Parliament and of the Council relating to annual financial statements, consolidated financial statements, and related reports for certain types of undertakings to include provisions for public disclosure of income tax information. Belgian legislation implementing the directive was published in the official gazette on 26 January 2024. The new rules were implemented through incorporation in the BCCA and apply to financial years starting on or after 22 June 2024.

EU directive on public CbC reporting

The EU directive sets out obligatory public CbC reporting requirements for EU-based companies as well as non-EU-based companies that do business within the EU through a subsidiary or a branch, and that have a total consolidated revenue that exceeds the threshold of EUR 750 million in each of the previous two consecutive financial years.

The EU directive also requires information relating to economic activities in every EU member state and every jurisdiction that is either on annex I of the EU's list of noncooperative jurisdictions or annex II (the “state-of-play” document) to be disclosed separately by jurisdiction. However, the information to be disclosed for other jurisdictions may be provided in an aggregated form.

Implementation of public CbC reporting law

Although the public CbC reporting requirement was originally added into the Belgian Tax Code, the royal decree instead transposes the amendment to the EU directive into the BCCA. This is because the amendment provides for articles laying down accounting rules rather than tax rules. However, it still affects the Belgian tax legislation.

Belgian legislation is generally aligned with the EU directive. In Belgium, the following companies are required to submit a public CbC report:

  • The ultimate parent entity (UPE) of a multinational group resident in Belgium when the group consolidated revenue exceeds EUR 750 million in each of the previous two consecutive years;
  • A Belgian resident standalone company with cross-border taxable presence when its net revenue exceeds EUR 750 million in each of the previous two consecutive years;
  • A Belgian resident medium-sized or large subsidiary of a non-EU multinational group when the group consolidated revenue exceeds EUR 750 million in each of the previous two consecutive years and provided that an EU resident parent entity has not already published the CbC report; and
  • A Belgian branch of a non-EU resident headquarter company where the net revenue of the headquarter company (or consolidated revenue of the group to which the headquarter company belongs) exceeds EUR 750 million in each of the previous two consecutive years and the turnover of the branch exceeds EUR 9 million in each of the previous two consecutive years. A Belgian resident subsidiary or branch of a non-EU multinational group is further exempted from the public CbC reporting requirements in Belgium where its non-EU UPE complies with the public CbC reporting rules as described in the EU directive.

The group’s CbC report must be made available on the group’s website for free and should be filed with the National Bank of Belgium.

Similar to the EU directive, these disclosure and filing requirements must be met within 12 months after the closing date of the reporting year.

Unlike the directive, the Belgian law does not include a safeguarding clause concerning the delay of any disclosure of commercially sensitive information for five years.

In addition, the content and format of the CbC report is determined by royal decree (see below). Nevertheless, the explanatory notes attached to the law provide that information related to jurisdictions on the Belgian list of jurisdictions with no or low taxation must also be published separately by jurisdiction.

If a company or branch office obliged to prepare and/or publish a report on income tax information fails to do so, an administrative fine of between EUR 50 and EUR 10,000 may be imposed. In addition, in cases of fraudulent intent, a custodial sentence of between one month and one year may also be imposed on members of a management body as well as persons entrusted with the governance of an establishment in Belgium, in combination with an administrative fine.

Key provisions of the royal decree

The key provisions of the April 2024 royal decree amending the royal decree of 29 April 2019 concerning the implementation of the BCCA can be summarized as follows:

  • Addition of definitions for “noncooperative tax jurisdiction” and “Belgian lists of tax jurisdictions” (the latter being listed in article 179 of the royal decree implementing the Income Tax Code (RD/ITC 92) and article 734quater RD/ITC 92)
  • Content of the report:

o The name of the Belgian resident UPE, Belgian resident standalone company, or UPE of a non-EU country;

o Financial year;

o Currency;

o A list of all entities and/or branches situated outside Belgium that are established in: (i) an EU member state; (ii) a tax jurisdiction that is noncooperative for tax purposes; (iii) a tax jurisdiction included in the Belgian lists of tax jurisdictions; or (iv) a tax jurisdiction identified by the Global Forum on Transparency and Exchange of Information for Tax Purposes as a state that does not effectively or substantially apply the international standard of exchange of information on request;

o A short description of the nature of the activities;

o Number of full-time equivalent employees;

o Revenue;

o Profit or loss before income tax;

o Income tax accrued and income tax paid. If relevant, the report may contain a general commentary explaining any material discrepancies with the corresponding amounts in previous financial years; and

o Accumulated earnings; 

  • Reporting basis:

o If a member state includes several tax jurisdictions, the information is aggregated at member state level; and

o The information regarding non-EU member states may be aggregated, except when it concerns entities and/or branches situated in tax jurisdictions within categories (ii), (iii), or (iv) above, which must be reported separately;

  • Language: The report should be prepared in the same language as the annual accounts;
  • Filing and technical requirements: 

o The report must be filed electronically with the National Bank of Belgium within 12 months after the fiscal year end. The report may not be included in the annual accounts or annual report;

o The model and format for electronic reporting are established by the European Commission;

o Filing fees are EUR 81.70, adjusted annually (on 1 January) based on the consumer price index; and

o The National Bank of Belgium will define and publicise the technical requirements and procedures for filing the report on its website; and

  • Accessibility of the report: The National Bank of Belgium must provide a copy of the report on its website in both structured data and PDF format, for at least the current and five previous calendar years.

Timing and key challenges

The new public CbC reporting rules apply for financial years starting on or after 22 June 2024. This means that for calendar year companies, the first reporting year will be the 2025 financial year.

Businesses will need to prepare for the operational and compliance complexities resulting from implementation of mandatory public CbC reporting. Accurate and efficient processes should be put in place to ensure that the CbC report is available on a timely basis to avoid fines for late submission, or incomplete or incorrect information.

In addition, companies need to consider how the information reported may be received and interpreted by the public. In this regard, companies may wish to consider including some explanatory notes with their public CbC reporting to prevent misinterpretation.

How Deloitte Belgium can help

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  • Policy monitoring;
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