Belgium Announced The Introduction Of Public Country-By-Country Reporting (CBCR)

On 26 January 2024, Belgium announced the introduction of public country-by-country reporting (CbCR) in the Belgian Official Gazette. The new law aligns with the EU directive 2021/2101 or the EU Public CbCR Directive.

The new rules are implemented in in the Belgian Code of Companies and Associations (BCCA) and apply to fiscal years starting on or after 22 June 2024.

The transposition of the EU Directive on public CbCR into Belgian law will have a significant impact on multinational enterprises (MNEs) based in Belgium and non-EU MNEs doing business in Belgium through a branch or subsidiary.

Who does it apply to?

A Belgian enterprise is required to publish a report on information regarding income taxes in following cases:

• An ultimate parent entity with consolidated revenue of more than €750m in each of the last two consecutive financial years.
• Standalone entities with a net turnover of more than €750m in each of the last two consecutive financial years.
• A subsidiary belonging to a group whose ultimate parent company is not governed by the laws of a Member State, where the consolidated revenue exceeds €750m in each of the last two consecutive years.

• A branch with total turnover of at least €9m in each of the last two consecutive financial years that was opened by either an affiliated enterprise of group whose ultimate parent company is not governed by the laws of a Member State or a standalone enterprise not governed by the laws of a Member State; in both cases, the consolidated (group) revenue must exceed €750m in each of the last two consecutive financial years.

   

Exemptions

There is no reporting obligation in Belgium if the €750m threshold for turnover is no longer exceeded for the last two consecutive financial years as reflected in the financial statements or if:

• The Belgian entity (subsidiary) qualifies as “smal” under article 1:24 of the BCCA.
• The standalone entity or the ultimate parent company (and all its subsidiaries, other group entities and branches) is subject to income tax only in Belgium and is therefore not a taxpayer in any other tax jurisdiction.
• The ultimate parent has already prepared and published a report pursuant to article 48 quarter of directive 2013/34/EU.
• The branch does not have (or no longer has) a total turnover of at least €9m for each of the last two consecutive years.

Information to be disclosed

The public CbCR report should include: (i) the  name of the ultimate parent, (ii) the related financial year, (iii) the currency used for presentation of the report, (iv) a list of all subsidiaries consolidated in the ultimate parent financial statement and are based in the EU or EU non-cooperative jurisdictions, (v) a brief description of the nature of activities, (vi) the number of full-time equivalent employees, (vii) the total net turnover (from third party and intragroup transactions), (viii) Profit or Loss before tax (ix) Amount of income tax payable in the country (x) Amount of income tax actually paid during the year (xi) Amount of profits that have not yet been distributed from past financial years.

Where such information is not available the Belgian subsidiary or branch must request the information from the ultimate parent or standalone company. If the information is not provided, the subsidiary or branch must publish a report of all the corporate tax information available and a statement that the ultimate parent or standalone company did not provide the necessary information. 

Where financial statements are required to be audited, the audit report must state whether the enterprise was in scope for the preceding year and if the report was published.

Timeline

The Public CbCR regulations as implemented in Belgian domestic law will be applicable for financial years starting on or after 22 June 2024. The MNEs are required to publish the public CbCR report within 12 months of the balance sheet date for the relevant year.

For the majority of Belgian companies / branches, this means that the new requirements will be applicable for the financial year starting on 1 January 2025.

Where to report 

The report must be submitted to the National Bank of Belgium (NBB) and simultaneously published on the company's website, where it must remain available free of charge for an uninterrupted period of five years.

Penalties

Failure to comply with the public CbCR requirements under the BCCA will result in a fine of between €50 and €10,000 being imposed on the non-compliant company.
In addition, failure to comply with the public CbCR requirements may also result in imprisonment for a period ranging from one month to one year if the failure is due to fraudulent intent.

If you have any questions regarding this topic, don’t hesitate to contact our RSM Belgium | Tax team ([email protected]).