BEPS or Base Erosion and Profit Shifting is the new plan of OCDE in transfer pricing between companies from a multinational group.

In accordance with the OCDE actions plan in order to avoid tax evasion, the european government has rolled out  a new directive and the Belgian law has been adapted regarding that matter.

Which multinational group are in the scope of this new legislation ?

Mainly big multinational groups.
The Country by Country reporting (CBC) must be completed if the total consolidated of realized income exceed 750 millions EUR following the annual report of the previous period.

This reporting is applicable since 01/01/2016.

What are the new obligations of companies that are part of a multinational group ?
To control the Base Erosion and Profit Shifting, OCDE require to fill in several forms if at least one of the following elements are exceeded :

• 50 millions EUR of recurring income
• 1 billion EUR of total balance
• 100 full time equivalent

In addition to these elements, Belgium has decided to add a detailed part for  the Local Form.
This part must be filled in if the total of cross-border transaction with entities of the multinational group exceed 1 million EUR at the moment of the closing.

What are these new reports ?

The first one is the from 275 Master File (MF).

It contains several questions regarding the multinational group as the description of the group activities, organizational structure and financial information.

This reporting is in application since 01/01/2016.

The second one is the form 275 Local File (LF).

This one contains questions regarding the local company (in Belgium) and is more detailed.
For example, you must complete a list of the local competitors and numeral information about different financial information.

This reporting is in application since 01/01/2016.

The second part of form 275 LF contain question’s about the detailed transactions between each companies part of the group exceeding the 1 million EUR of cross-border transcation.

This part of LF is in application since 01/01/2017.

The last and main part of this reporting is the form 275 Country by Country (CbC).

This is the most difficult part because it contains questions about detailed financial and non financial information about each company that is part of a multinational group.

This part is to be completed by the ultimate parent entity if it is located in a signatory country of this OCDE agreement.
If not, one of the companies from the group must supply the role of the ultimate parent entity.

If the group has to complete CbC because the elements are exceeded, each companies part of the multinational group must inform their local competent autorities with the form 275 Country by Country reporting – Obligation of Notification (CbC NOT).

This form contain general information’s on the local entity and the ultimate parent entity.
It contains also a part in case if the parent entity is not obligated or refuse to full fill the CbC, to designate another entity of the multinational group to supply the role of filling CbC reporting.

This notification has to be sent at the latest, the day of declaration’s group period.

An important point to note : 

Each statement detailed above must be submitted on the “Minfin” government platform in XML format.

For further information or if you need to fill in at least one of these forms, you can contact us at the following e-mail adress : sam@accal.be

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Obligation to:

1. Adapt internal control and reorganize with assessment taken into account characteristics of client, products/ services, countries and supply law.
2. Prior verification, review and permanent vigilance of the identification of client with notification of a-typical and suspicious transactions to CFI.
3. Limitation of use cash to max € 3.000,00.
4. Competent authorities: NBB, FSMA, Authorities of finance, partner institutions (FMI, IMF, OLAF, IBR, IAB, …)
5. Administrative and criminal sanctions (from € 150 to € 1.250.000 or 10% revenues).

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