Personal scope of application As per 26 June 2022

Are there any deviations from the Directive in defining the intermediary?

2021/06/17

No specific regulation in deviation of the Directive.

How is an intermediary defined? Is there a differentiation between a corporate entity and an individual person?

2021/06/17

The Belgian bill refers to the definition of “intermediary” laid down in DAC 6 (new Art. 326/1, 4° BITC). According to the explanatory memorandum to the Belgian law and the DAC6 FAQ (8.1.1), the notion of “intermediary” should be interpreted in a broad sense, obliging “any natural or legal person that, in one way or another, designs, markets, organises or makes available for implementation or manages the implementation of a reportable cross-border arrangement” to report such arrangement to the competent national authority. Any natural or legal person can qualify as intermediary according to the Directive, as implemented into Belgian domestic tax law. In order to be an intermediary, a person shall meet at least one of the following additional conditions ('territorial nexus criterion'):(a) be resident for tax purposes in a Member State;(b) have a permanent establishment in a Member State through which the services with respect to the arrangement are provided;(c) be incorporated in, or governed by the laws of, a Member State;(d) be registered with a professional association related to legal, taxation or consultancy services in a Member State.

Can a corporate tax department (or its members) within a MNE or within a group of entities qualify as an intermediary?

2021/06/17

No. In principle, the Belgian intermediary legal entity, which is the in-house corporate tax department members' employer, should be considered as the "intermediary".

How are the actions of designing, marketing, organizing, making available for implementation or managing the implementation of a tax arrangement defined?

2021/06/17

No specific definition in the Belgian domestic tax law, in addition to Directive definition.

Have the legal preconditions regarding the territorial nexus for an intermediary been implemented in accordance with the Directive?

2021/06/17

Yes. The EU nexus criterion has been implemented, same as in the Directive.

Are there any other conditions apart from those of the Directive, such as the territorial nexus of a tax arrangement to a certain Member State, which trigger a reporting obligation of an intermediary (e.g. including intermediaries from outside the EU)?

2021/06/17

No. The same as in the Directive.

In which cases is the relevant taxpayer obliged to report? Are there deviations from the Directive?

2021/06/17

No. The same as in the Directive. Secondary reporting obligation rests with the taxpayer when there is no EU based intermediary engaged or the EU intermediary is bound by the professional secrecy ('legal privilege') and that is not waived by the taxpayer.

Are there any other persons beside intermediaries or relevant taxpayers obliged to report?

2021/06/17

No.

Are there any deviations from the Directive in defining the relevant taxpayer?

Mechanism to avoid multiple reporting

Which measures have been taken to avoid multiple reporting obligations referring to an intermediary obliged to report in several countries? Are there deviations from the Directive?

2021/06/17

An intermediary could be exempt from the reporting obligation under the same conditions as in the Directive, i.e. notably in case of (i) Plurality of intermediaries or (ii) an intermediary bound by professional privilige. (i) Plurality of intermediaries: When several intermediaries are involved in the same reportable cross-border arrangement, the obligation to report information on the arrangement lies with all the intermediaries. Nevertheless, an intermediary is exempt from the reporting obligation if he can provide proof in writing that another intermediary has already provided the information (Art. 326/6 BITC). Following the explanatory memorandum to the law, this “proof in writing” will be fulfilled where the intermediary (who has not reported the arrangement) provides the “unique reference number” that has been issued by the Belgian tax authorities to the intermediary who has reported the arrangement. The Belgian law states that the reporting intermediary must immediately provide the unique reference number and the summary concerning the reported arrangement to the other intermediaries involved and the taxpayer concerned (Art. 326/5 BITC).(ii) Professional privilege: There is no reporting obligation when an intermediary is bound by professional secrecy rules. In this scenario, the intermediary must notify the other intermediaries (if any) in writing of the reason why he cannot perform his report¬ing obligation (i.e. the actual reporting is prevented due to legal professional secrecy rules), which leads to a shift of the reporting duty to the other intermediaries (if any). (Ar. 326/7, § 2 BITC).

Which measures have been taken to avoid multiple reporting obligations referring to more than one intermediary obliged to report? Are there deviations from the Directive?

2021/06/17

Plurality of intermediaries: When several intermediaries are involved in the same reportable cross-border arrangement, the obligation to report information on the arrangement lies with all the intermediaries. Nevertheless, an intermediary is exempt from the reporting obligation if he can provide proof in writing that another intermediary has already provided the information (Art. 326/6 BITC).

Which measures have been taken to avoid multiple reporting obligations referring to a relevant taxpayer obliged to report several countries? Are there deviations from the Directive?

2021/06/17

The same multiple reporting obligations as in the Directive. The relevant taxpayer shall be exempt from filing the information if it has proof, in accordance with national law, that the same information has been filed in another Member State.The following rule, which defines, in which country the report has to be filed primarily, exists:Where the relevant taxpayer has an obligation to file information on the reportable cross-border arrangement with the competent authorities of more than one Member State, such information shall be filed only with the competent authorities in Belgium if Belgium features as first in the list below:1) the Member State where the relevant taxpayer is resident for tax purposes;2) the Member State where the relevant taxpayer has a permanent establishment benefiting from the arrangement;3) the Member State where the relevant taxpayer receives income or generates profits, although the relevant taxpayer is not resident for tax purposes and has no permanent establishment in any Member State;4) the Member State where the relevant taxpayer carries on an activity, although the relevant taxpayer is not resident for tax purposes and has no permanent establishment in any Member State.

Which measures have been taken to avoid multiple reporting obligations referring to more than one relevant taxpayer obliged to report? Are there deviations from the Directive?

2021/06/17

Belgian domestic tax law does not deviate from the Directive. Article 326/9 BITC in this respect stipulates that where there is more than one relevant taxpayer and the reporting obligation rests with the relevant taxpayer, the reporting must be done by the relevant taxpayer that:1) agreed the arrangement with the intermediary;2) manages the implementation of the arrangement.A reporting exemption applies if there is written proof that the reporting was done by another relevant taxpayer.

How does the National Tax Authority expect the conditions for exemption from filing a report to be met?

2021/06/17

The specific form to be used by the intermediary or relevant taxpayer for the reporting obligation (exemption) is still to be published as per 15 August 2020.

Material scope of application

Are national tax arrangements subject to reporting under the Directive?

2021/06/17

No, purely domestic arrangements (i.e. arrangements that are implemented in Belgium only) are not targeted.

Which taxes are affected? Are there deviations from the Directive?

2021/06/17

No. The same taxes on which the Directive on Administrative Cooperation (Directive 2011/16/EU) applies. The Belgian tax administration indicates that the DAC6 reporting obligation relates to income taxes, inheritance and gift taxes, transfer taxes. Arrangements concerning VAT, customs- and excise duties and social security contributions are excluded.

Does the hallmark catalogue deviate from the Directive? If yes, to what extent?

2021/06/17

No. The Belgian legal text refers to the list of hallmarks enshrined in Annex 4 of DAC 6.

Which hallmarks are linked with the main benefit test?

2021/06/17

Generic hallmarks under category A and specific hallmarks under category B and C 1 (b)(i), C1 (c) and C1 (d) .

How is the main benefit test defined?

2021/06/17

If an arrangement falls under A, B and C.1.b.i, C.1.c, and C.1.d hallmarks, the arrangement only needs to be reported if the main benefit test ("MBT") has been met. The MBT will be satisfied if it can be established that the main benefit or one of the main benefits which, having regard to all relevant facts and circumstances, a person may reasonably expect to derive from an arrangement is the obtaining of a tax advantage, in line with Annex IV of the Directive.

How is a tax advantage defined?

2021/06/17

There is no further definition of a tax advantage in the Directive nor Belgian domestic law. Belgian tax authorities clarify that the MBT should only be assesses on the basis of direct taxes (section 5.5) and that the tax advantage could also be obtained in a non-EU Member State.

Are there any deviations from the Directive in defining a cross-border arrangement?

Is there a white list defining arrangements explicitly excluded from a reporting obligation? If yes, please provide details.

Are there any deviations from the Directive in defining associated enterprises?

Reporting process

When is a cross border arrangement made available for implementation (e.g. handover of contract documents)?

2021/06/17

No specific definition in Belgian domestic tax law. The Belgian tax administration clarifies that this implies that a cross-border arrangement must be reported before the participants give their agreement on the effective implementation.

When is a cross-border arrangement ready for implementation?

2021/06/17

No specific definition in Belgian domestic tax law. The Belgian tax administration clarifies that the taxpayer should be sufficiently informed on the elements necessary to implement the arrangement.

When has the first step in the implementation of a cross-border arrangement been made?

2021/06/17

No specific definition in Belgian domestic tax law.

Which information should be included in the report? Are there deviations from the Directive?

2021/06/17

As regards the wide array of data (relating to the arrangement, the tax benefit, the taxpayer concerned, etc.) to be reported to the Belgian tax authorities, the Belgian law is aligned to DAC 6 (Art. 338, § 6/4 BITC). The report should include:1) the identification of intermediaries and relevant taxpayers, including their name, date and place of birth (in the case of an individual), residence for tax purposes, TIN and, where appropriate, the persons that are associated enterprises to the relevant taxpayer;2) details of the hallmarks set out in Annex IV that make the cross-border arrangement reportable;3) a summary of the content of the reportable cross-border arrangement, including a reference to the name by which it is commonly known, if any, and a description in abstract terms of the relevant business activities or arrangements, without leading to the disclosure of a commercial, industrial or professional secret or of a commercial process, or of information the disclosure of which would be contrary to public policy;4) the date on which the first step in implementing the reportable cross-border arrangement has been made or will be made;5) details of the national provisions that form the basis of the reportable cross-border arrangement;6° the value of the reportable cross-border arrangement;7) the identification of the Member State of the relevant taxpayer(s) and any other Member States which are likely to be concerned by the reportable cross-border arrangement;8) the identification of any other person in a Member State likely to be affected by the reportable cross-border arrangement, indicating to which Member States such person is linked. The reporting of certain information should not only be made in one of the official languages of Belgium (French, Dutch or German), but also in English (Art. 326/10 BITC). The Belgian Minister of Finance has even specified that an erroneous translation would be considered as an incomplete reporting, subject to administrative sanctions.

What does the reporting process look like? Are there deviations from the Directive?

2021/06/17

No deviations, the same data as in the Directive. As regards the procedural aspects of the reporting obligation, the Belgian law refers to DAC 6. According to Art. 326/3 BITC, intermediaries must file information that is within their knowledge, possession or control on reportable cross-border arrangements with the competent authorities within 30 days beginning:1) on the day after the reportable cross-border arrangement is made available for implementation;2) on the day after the reportable cross-border arrangement is ready for implementation; or3) when the first step in the implementation of the reportable cross-border arrangement has been made, whichever occurs first.In practice, discussions are expected to arise regarding the starting point of this 30-day deadline.

Is the entire report to be provided by the intermediary/relevant taxpayer? Who must provide the report?

2021/06/17

In principle, the intermediary as well as the relevant taxpayer can be obliged to provide the entire report. The modalities of the report are still to be defined in an official formular still to be published by Royal Decree in Belgium.

What are the respective deadlines for the intermediary and the relevant taxpayer to file the report? Are there deviations from the Directive in terms of filing the information within 30 days?

2021/06/17

No. The same as in the Directive. The reporting by primary intermediaries and relevant taxpayers must be done within 30 days, beginning on:1) the day after the reportable cross-border arrangement is made available for implementation to that relevant taxpayer, or2) the day after the reportable cross-border arrangement is ready for implementation by the relevant taxpayer, or3) when the first step in the implementation has been made in relation to the relevant taxpayer, whichever occurs first.The reporting by secondary intermediaries must be done within 30 days beginning on the day after they provided aid, assistance or advice.

Which numbers are assigned by local tax authorities to the cross-border arrangements?

2021/06/17

No specific information available.

What is the reporting deadline for arrangements the first step of which was implemented between 25 June 2018 and 30 June 2020?

When is the reporting deadline for arrangements for which the event triggering the reporting obligation lies between 1 July 2020 and 31 December 2020?

When is the reporting deadline for arrangements for which the event triggering the reporting obligation lies after 1 January 2021?

Penalties

In which cases are penalties imposed?

2021/06/17

According to Belgian domestic tax law, insufficient or incomplete reporting of information is subject to an administrative fine of between EUR 1,250 and EUR 12,500.A failure to report or late reporting is subject to a fine of between EUR 5,000 and EUR 50,000.A penalty ranging between EUR 12,500 and EUR 100,000 is applied for the above-mentioned offences if the taxpayer had the intention to evade taxes.

What are the penalties?

2021/06/17

Yes, see different sanctions in our response to Q31.

Is a distinction made between penalties imposed on intermediaries/relevant taxpayers/other persons obliged to report?

2021/06/17

No. The fines are the same for intermediaries and taxpayers.

What are the penalties in case of redundant reports? A redundant report is a report, which was filed, although there is no obligation to file one.

2021/06/17

No specific information available.

Do the penalties differ with regard to incomplete, incorrect, missing or late reports? Are there any gradations?

2021/06/17

Yes, see different sanctions in our response to Q31

Are arrangements the first step of which was implemented between 25 June 2018 and 30 June 2020 treated differently in the means of penalties?

Other aspects

Do already other reporting regimes on cross-border arrangements exist?

2021/06/17

No, this DAC6 reporting is completely independent from other reporting standards, implemented in Belgium such as:1) DAC1 established the mandatory exchange of information in only 5 categories of income and capital in cross-border situations, i.e. ownership and income from immovable property, income from employment, directors’ fees, pensions and life insurance products not covered by other Directives.2) DAC2 broadened the scope of the automatic exchange of information to income, profit and the state of financial accounts held by residents of a member state in another member state. DAC2 is the implementation of the OECD’s Common Reporting Standards (CRS) within the EU. 3) DAC3 was implemented to expand the automatic exchange of information to cross-border tax rulings and transfer pricing-agreements.4)DAC4 introduced the exchange of country reports. In the country reports, multinational companies must provide specific financial information on an annual basis for each of the tax jurisdictions in which they are active.

Are there any other special deviations from the Directive? 

2021/06/17

There are no other deviations from the Directive.

What is the name of the national Tax Authority responsible for DAC6?

Do any other obligations apart from reporting a reportable cross-border arrangement exist under the national DAC6 legislation? (i.e. indication of the arrangement in the tax return)

Professional privilege/secrecy

Who is primarily obliged to report? Is there a primary reporting obligation of the intermediary or the relevant taxpayer? Is there legal privilege and in how far has it been considered for allocating the reporting obligation?

2021/06/17

The intermediary is primarily obliged to report. The taxpayer reports in cases as mentioned under Q7. Yes, there is a legal privilege. The taxpayer is obliged to report in case an intermediary uses legal privilage. There is no reporting obligation when an intermediary is bound by professional secrecy rules. In this scenario, the intermediary must notify the other intermediaries (if any) in writing of the reason why he cannot perform his reporting obligation (i.e. the actual reporting is prevented due to legal professional secrecy rules), which leads to a shift of the reporting duty to the other intermediaries (if any). In the absence of other intermediaries, the intermediary should notify the taxpayer, in writing and motivated, of the reason why he cannot perform his reporting obligation, which leads to a shift of the reporting duty to the taxpayer (article 326/7, § 1 BITC).The taxpayer may waive this professional privilege, which may allow the intermediary to fulfil his reporting obligation (article 326/7, § 2 BITC).Based on the explanatory memorandum of the Belgian law, professional privilege may only be invoked in specific situations, i.e. where the taxpayer is represented or being defended before the judicial courts or where the intermediary determines the legal position of the taxpayer.

Does the reporting obligation breach a legal professional privilege under national law?

2021/06/17

Also in Belgium, the taxpayer is obliged to report in case an intermediary uses legal privilege (see response to Q8 above). There is no reporting obligation when an intermediary is bound by professional secrecy rules. In this scenario, the intermediary must notify the other intermediaries (if any) in writing of the reason why he cannot perform his reporting obligation (i.e. the actual reporting is prevented due to legal professional secrecy rules), which leads to a shift of the reporting duty to the other intermediaries (if any). In the absence of other intermediaries, the intermediary should notify the taxpayer, in writing and motivated, of the reason why he cannot perform his reporting obligation, which leads to a shift of the reporting duty to the taxpayer (article 326/7, § 1 BITC).The taxpayer may waive this professional privilege, which may allow the intermediary to fulfill his reporting obligation (article 326/7, § 2 BITC).Based on the explanatory memorandum of the Belgian law, professional privilege may only be invoked in specific situations, i.e. where the taxpayer is represented or being defended before the judicial courts or where the intermediary determines the legal position of the taxpayer.

Does the national law make reference to professional privilege or professional secrecy?

What is the difference, as per the national law, between professional privilege and professional secrecy?

To which categories of intermediaries does the professional privilege or professional secrecy apply?

In the context of the reporting obligation, under which conditions are the intermediaries entitled/obliged to make use of professional privilege or professional secrecy?

In cases in which professional privilege or secrecy applies, please describe the procedure for notification.

Does the national law provide specific conditions to waive professional privilege or professional secrecy?

Peter De Vos
Partner