When filing their tax returns for corporation tax, companies must report any payments made directly or indirectly to persons located in 'tax havens', using a separate form. This applies if a payment is above 100,000 euros for each taxable period. If this declaration is not made, the payment is not deductible as a business expense.
Both Belgium and the OECD maintain a list of tax havens. The Belgian list basically has countries with a nominal corporate tax rate lower than 10%. The OECD maintains a list of countries that do not meet the OECD standard on transparency and exchange of information. Until recently, the OECD only listed the British Virgin Islands - which also appear on the Belgian list.
The Global Forum on Tax Transparency and Exchange of Information for Tax Purposes of the OECD published its latest report on 4 November on the application of the exchange of information regarding 17 countries or jurisdictions. The Marshall Islands, Panama, Guatemala, Micronesia and Trinidad and Tobago were considered as non-compliant. Kazakhstan still hasn't been given a final rating.
The Marshall Islands and Micronesia were already on the Belgian list. Payments to these countries must therefore be declared. Payments to Panama, Guatemala and Trinidad and Tobago, made after 4 November 2016, now also fall within the scope of the reporting obligation.
We note, finally, that the scope of the reporting obligation has recently been expanded considerably with the passing of the Programme Act of 1 July 2016.
If you are unsure whether or not to report certain transactions, then please contact us for more information about the reporting obligation.
We base our advice on current legislation, interpretations and legal doctrine. This does not prevent the administration from being able to challenge it or to change existing interpretations.