On 21 May 2024, the Belgian Tax Authorities (BTA) provided further practical guidance with respect to the Pillar Two notification obligation for in-scope multinational enterprises and large-scale domestic groups with consolidated annual revenues exceeding EUR 750 mio in two of the four previous fiscal years.
In-scope taxpayers are required to take immediate action as they need to register within at least 45 days after the publication in the Belgian Official Gazette of a still to-be published Royal Decree of 15 May 2024 which can be expected momentarily. Based on the notification template (and related guidance) published on the BTA’s website (only available in Dutch or French, and further referred to as the P2 Notification Form), the volume and number of datapoints to be provided is substantial. Once registered, a specific Pillar Two identification number (P2 TIN) will be issued that taxpayers will need to use for Pillar Two advance tax payments, reporting and compliance.
Background
End of last year, Belgium implemented Pillar Two legislation in its domestic legislation (as enacted by the Law of 19 December 2023 and as recently amended), including a Qualified Domestic Minimum Top-up Tax, an Income Inclusion Rule and an Undertaxed Profits Rule. For more information, please refer to our Tax Alerts: Belgian parliament approves draft bill on Pillar Two (ey.com) and Belgian Pillar Two legislation further aligned with OECD’s guidance (ey.com).
Notification requirement
Who
Multinational enterprises and large-scale domestic groups with consolidated annual revenues exceeding EUR 750 mio subject to Pillar Two and with Belgian nexus need to register themselves with the Federal Public Service Finance (FPS Finance), by the completion and filing of the P2 Notification Form, specifically for Pillar Two purposes allowing them to make IIR and QDMTT advance tax payments and submit Pillar Two related notifications and tax returns.
The submission of the P2 Notification Form must be done:
- if there is only one ultimate parent entity established in Belgium: by that Belgian ultimate parent entity;
- if there are several ultimate parent entities established in Belgium: by the Belgian ultimate parent entity designated as agent;
- if there is no ultimate parent entity and only one group entity is established in Belgium: by that Belgian group entity; and
- if there is no ultimate parent entity and multiple group entities are established in Belgium: by the Belgian group entity designated as agent.
For clarity sake, if an in-scope multinational or large-scale domestic group has multiple Belgian entities, only one Belgian P2 TIN needs to be requested (and thus only one P2 Notification Form has to be filed).
The agent must be designated via a specific mandate form and must be digitally signed and submitted together with the P2 Notification Form. Per the date of publication of this Tax Alert, the specific (PDF) mandate form is not yet available. Important to note is that said form is an official form that cannot be changed.
Taxpayers that do not fall in scope of Pillar Two are not required to take any action.
When
The P2 Notification Form must be filed no later than 30 days after the start of the reporting year for which the multinational enterprise and/or large-scale domestic group falls within the scope of Pillar Two.
However, in-scope taxpayers who have already started or will soon start their first reporting year seem to be given a bit more leniency as they are required to notify within at least 45 days after the publication of the still-to-be published Royal Decree of 15 May 2024 in the Belgian Official Gazette. On 21 May 2024, this Royal Decree was not yet published in the Belgian Official Gazette.
What
The volume of information requested to disclose and submit in the P2 Notification Form is quite substantial and the question can be raised why this level of information is already required at this point in time.
- Part I – Information related to the multinational enterprise or large-scale domestic group
- I.1. Name of the multinational enterprise group or large-scale domestic group
- I.2. Start date of the reporting year (dd/mm/yy), with the earliest possible date being 31/12/2023)
- I.3. End date of the reporting year (dd/mm/yy)
- I.4. Address of the UPE establishing the Consolidated Financial Statements (CFS) for Pillar Two purposes, including street, number, postal code, municipality, and country (ISO code)
- I.5. Phone number (optional)
- I.6. Fax number (optional)
- I.7. E-mail address (optional)
- I.8. Hyperlink to corporate website (optional)
- I.9. Type of entity (legal entity is automatically mentioned)
- I.10. Legal entity form, being either an ‘organization without legal personality’ (this option is to be chosen if the UPE preparing the CFS for Pillar Two purposes is located in Belgium) or a ‘foreign entity’ (this option is to be chosen if the UPE preparing the CFS for Pillar Two is located abroad)
- I.11. Details of the individual representing the UPE, including first name, last name, Belgian National Register number or the so-called BIS-number which is a unique identification number for (foreign) individuals not registered with the Belgian National Register.
- I.12. Capacity of the multinational enterprise group/large-scale domestic group (pre-populated field)
- I.13. Nature of the group, being either a multinational enterprise group or large-scale domestic group
- I.14. Confirmation whether the group constitutes of only one sole legal entity (or not)
- Part II – Information related to the CFS of the multinational enterprise or large-scale domestic group
- II.1 Type of CFS of the UPE (as defined under Article 10 of the OECD Model Rules (or as implemented in domestic law by Article 3, 6° of the Law of 19 December 2023)
- II.2. Accounting standard used for the CFS the UPE, including the corresponding ISO code
- II.3. ISO code of the currency used for the CFS of the UPE
- II.4. Information related to the publication of the CFS of the UPE online (hyperlink)
- II.5. If II.4. does not apply, confirmation that the CFS are not published online
- Part III – Information related to the ownership structure of the multinational enterprise or large-scale domestic group
The purpose of this section of the form is basically to map the relevant legal entity ownership structure of the multinational enterprise or large-scale domestic group and corresponding Pillar Two qualification of each entity.
- Under each of the below subpart III.1 to III.4, the following information should be provided (as known for the first day of the reporting year):
- Name
- Jurisdiction (ISO code)
- TIN (in line with the OECD tax identification number structure, similar to the TIN needed one preparing a CbC report following the Belgian standard in this respect)
- GloBE status, which includes the following (note that multiple options are possible): constituent entity, flow-through entity (tax transparent or reverse hybrid), hybrid entity, permanent establishment, main entity, minority-owned parent entity, minority-owned subsidiary, minority-owned constituent entity, investment entity, joint-venture, joint venture subsidiary, non-material constituent entity, excluded entity, ultimate parent entity, partially-owned parent entity, intermediate parent entity
- Type of excluded entity (if applicable): governmental entity, international organization, non-profit organization, pension fund, investment fund that is an UPE, real estate investment vehicle that is an UPE, entity owned by an excluded entity
- Sub-group (if applicable): constituent entity, minority-owned subgroup (specify which minority-owned subgroup), standalone minority-owned constituent entity, investment entities, joint venture group (specify which joint venture group), stateless constituent entity
- TIN of the entity on top of shareholding structure of the sub-group (if applicable)
- Consolidating entity for Pillar Two purposes
- III.1.A. Information in relation to the UPE or UPE’s (Belgian or foreign)
- III.1.B. If the UPE is Belgian, the above information should be provided in this subpart for all the Belgian and foreign entities under the UPE
- III.2.A. Information related to the Intermediary Parent Entity or Entities (Belgian or foreign)
- III.2.B. If the Intermediary Parent Entity is Belgian, the above information should be provided in this subpart for all the Belgian and foreign entities per Belgian Intermediary Parent Entity
- III.3.A. Information related to Partially Owned Parent Entity or Entities (POPE) (Belgian or foreign)
- III.3.B. If POPE is Belgian, the above information should be provided in this subpart for all the Belgian and foreign entities per Belgian POPE
- III.4. Information related to any other entity established in Belgium
- Under each of the below subpart III.1 to III.4, the following information should be provided (as known for the first day of the reporting year):
- Part IV – Information related to the point of contact
- IV.1. Name of the enterprise which acts as point of contact of the group in relation to the creation of the Belgian P2 TIN (this should be the Belgian entity filing the P2 Notification Form)
- IV.2. Tax identification number of the enterprise
- IV.3. Jurisdiction of the enterprise (always Belgium or BE as ISO code)
- IV.4. Address of the enterprise (street, number, postal code, municipality)
- IV.5. Name of the contact person within the enterprise
- IV.6. E-mail address and phone number of the contact person within the enterprise
How
- Taxpayers must register with the FPS Finance by submitting a P2 Notification Form, in XML format, that will be made available on the digital government platform “MyMinfin”. When submitting the XML file, the following items will need to be confirmed:
- Start- and end-date of the reporting period
- Whether the company wishes to make use of P2 related prepayments (note, this is not binding)
- The actual XML file, together with the (PDF) mandate form
- Contact e-mail address
Once successfully submitted, the FPS Finance will register the multinational enterprise or large-scale domestic group with the Crossroads Bank for Enterprises (being the Belgian trade register). After that, the specific Belgian P2 TIN for the group will be sent by e-mail to the entity that registered the group.
Implications to businesses
It is clear that the required information to complete the P2 Notification Form requires a good understanding of the Pillar Two scope of the multinational enterprise or large-scale domestic group, including the Pillar Two qualification of each entity.
Taxpayers should therefore take immediate action and gather (if not yet done) and review the required information to complete the required Pillar Two notification form within a short window of time. It is not clear what the consequences are in case this timing is not respected. The still to-be published Royal Decree may provide further guidance on this (and other) matter(s).
In case you need any assistance with the completion of the notification form, with the practical electronic submission of the form or more in general with Pillar Two related questions, please do not hesitate to reach out to us or to your dedicated person of contact.
