New tax registration obligation looming for large corporate groups

Driven by Europe, Belgium introduced a “minimum tax for multinational companies and large domestic groups” at the end of 2023. This law applies to Belgian-based companies that are part of a corporate group (multinational or domestic) that achieves a turnover of at least €750 million on a consolidated basis. The Belgian tax authorities have recently imposed a reporting obligation in this regard, for which the submission deadline is set in the near future.

WHAT IS THE GOAL?

The legislator wants to ensure that the companies concerned have an effective tax burden of 15%. The word ‘effective’ is very important here: although the Belgian corporation tax rate is set at 25% today, the effective tax burden can be substantially lower due to the application of certain tax deductions (e.g. the innovation deduction or possibly the investment deduction).

In principle, if a company does not reach this minimum tax rate of 15%, an additional top-up tax will be imposed. In Belgium, this ‘top-up tax’ is determined at country level (read: for all Belgian entities together). An important note here is that certain ‘safe havens’ have been created that moderate the impact of this law. Thus, a case-by-case examination must be made as to whether or not (and to what extent) a company must comply with the obligations imposed by the new minimum tax.

WHAT TO DO?

With the implementation of this new law, new administrative obligations arise. A company must meet these obligations as soon as it belongs to a qualifying group, even if the company can make use of a safe haven or if an effective tax burden of at least 15% is realised. Even if you are dealing with a small Belgian company that is part of a large multinational group, you should take this registration obligation into account.

More specifically, the company in question must register (again) with the Crossroads Bank for Enterprises (“CBE”). To this end, it must register with the FPS Finance via a notification form made available on MyMinfin. This form must provide qualitative and quantitative information on the corporate group (including detailed information on the shareholder structure and financial data).

After a valid registration, the corporate group receives a company number specific for the minimum tax application (the so-called Pillar 2 identification number). The Pillar 2 identification number enables a corporate group to make advance payments for minimum tax, receive notifications and file returns. For compliance purposes, correct registration is crucial .

WHEN?

In principle, the P2 notification form must be submitted no later than 30 days after the start of the first reporting period in which the group will have to comply with Pillar II legislation. For enterprises that have already commenced the first reporting period subject to the Pillar II legislation (e.g., in-scope groups following the calendar year for accounting purposes), an extension is granted until 45 days after the publication of the Royal Decree concerning Pillar II registration in the Belgian State Gazette on May 29, 2024. This means that Belgian entities belonging to in-scope groups for which the relevant reporting period has already started have until July 13, 2024 to submit the P2 form via MyMinfin.

Summarized, it is important that you check whether your company falls under the scope of the new minimum tax legislation. If this is indeed the case, you should take the necessary steps to register your company in time. Our team at Van Havermaet is happy to help you comply with this tax obligation.