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Belgium: Multilateral instrument (MLI) is ratified

Belgium: Multilateral instrument (MLI) is ratified

The federal law containing assent with the multilateral instrument (MLI) that implements the tax treaty-related measures of the OECD action plan on base erosion and profit shifting (BEPS) in existing bilateral tax treaties was published in the Belgian official gazette in July 2019, and this publication in the official gazette completes the final step in the Belgian process of ratification of the MLI.


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The MLI will apply for Belgium, at the earliest, as from 1 January 2020 for withholding tax purposes and, in principle, as from tax periods starting on or after 1 April 2020 for other tax purposes.

Ultimately, more than 50 treaties to which Belgium is a signatory could be modified. The provisions in the MLI are also expected to influence tax treaties that Belgium will conclude in the future. The MLI contains minimum standards (that must be implemented) and recommendations (that are optional). The main consequences of the MLI for Belgium are:

  • Extension of the definition of permanent establishment—broadening of the definition with commissionaires and introduction of anti-fragmentation rules in respect of preparatory or auxiliary activities
  • Introduction of a principal purpose test to counter treaty abuse
  • Provision for a minimum standard for a mutual agreement procedure (Belgium has also opted for the arbitration procedure)

Read a July 2019 report prepared by the KPMG member firm in Belgium

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