The Belgian tax authorities are expected to increase focus on transfer pricing in 2012. Since establishing a special transfer pricing audit department in 2004, the number of tax officials assigned to this department has quadrupled. Further growth is expected in 2012 with the number of officials dedicated to the special transfer pricing audit department increasing to 20.

Several issues are expected to trigger transfer pricing audits, including consistent losses and business restructuring, an issue that transfer pricing inspectors focused on during 2011. In a new attempt to address double taxation resulting from restructuring, the Belgian tax authorities have begun to utilize mutual agreement procedures or European Arbitration Convention to reallocate cost of restructuring to the beneficiaries and away from the business undergoing restructuring.

Related Links:
(a) KPMG: Tax News Flash
(b) TP Week: International Tax Review