You may not yet be subject to a transfer pricing audit, but you want to find out more on how to prepare for the day on which you receive your first Request for Information. We recommend to read through the audit process and insights that are included in the section: Help! I’m under TP audit. Furthermore, this section of the website provides various information and several insights relating to transfer pricing audits. Hereafter, we listed our key tips and tricks.

Key tips & tricks

• Perform an internal transfer pricing risk assessment exercise (e.g., in the form of a SWOT analysis) to adjust/align transfer pricing policies if required to decrease the risk for an audit and the risk in case of an audit.
• Use the standard questionnaire used as a first request for information in transfer pricing audits (which can be consulted here) to assess your TP audit readiness.
• Ensure proper internal documentation and archiving of key business-related decisions that are made / economic events or industry circumstances that occur that impact the (profitability of the) company at the time of occurrence as they may prove useful during future audits (often years later), as well as the transfer pricing consequences they may have. For example, why have losses been incurred / what was the impact of the COVID19-pandamic on our business, etc.
• Ensure proper documentation supporting the rationale of all business-related decisions which might impact the applied transfer prices compared to ‘normal market conditions’.

Furthermore, in this part of the website, we gather additional information that may useful to consider in preparing for transfer pricing audit readiness, in topical articles on specific case matters:

Regulatory & Compliance

:: The burden of proof in transfer pricing
:: Transfer pricing regulations
:: Circular Letter 2020/C/35
:: Compliance and documentation

Special Cases

:: Special case: “Structural” losses
:: Special case: Intragroup financing
:: Special case: Cost disbursements (without mark-up)
:: Special case: Focus on ex-post operating results

Insights

:: The selection of targeted enterprises
:: Mutual Agreement Procedure / EU Arbitration

Useful Documents

:: Standard questionnaire  

A standard questionnaire consisting of a list of transfer pricing related questions. We note that a tailor-made questionnaire based on information available to the tax authorities as included in the transfer pricing documentation forms (275.LF & 275.MF) and country-by-country reporting already submitted by the taxpayer is also circulating, yet combined still with large chunks from the standard questionnaire.

:: Visitation from the tax authorities (Fiscale Visitatie / Visite Fiscale)

The Belgian tax authorities have the right to visit your business premises unannounced – including for performing a transfer pricing audit.