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Belgium: New Obligation to Report Payments to Tax Havens

(Jan. 25, 2010) As of the first of this year, Belgian companies and the permanent establishments in Belgium of foreign companies are required to include on their tax returns information about certain payments to tax havens. The reporting threshold is €100,000, and a tax haven is defined as either 1) a country considered by the Organization for Economic Development's Forum on Transparency and Exchange of Information as not, for the entire taxable period, implementing OECD exchange of information standards; or 2) any country listed in a royal decree as having no corporate income tax or having a corporate income tax of less than 10% (the list as in force on the first day of the year applies to the whole year). (René Offermanns, Beligum: Reporting Obligations for Payments to Tax Havens Introduced, TAX NEWS SERVICE, Jan. 10, 2010, from [email protected] (subscription service).)

Any payment that was not reported in the tax return is not deductible. Even if reported, a payment is deductible only if it can be shown that it was for an “actual and genuine” transaction, rather than merely intended to avoid taxation. (Id.)