Background on the CTCP?
The Belgian Co-operative Tax Compliance Programme (CTCP) was launched in 2018 with the dual objectives of achieving faster legal certainty for companies and enhancing compliance with tax obligations. The CTCP marked a significant shift from a reactive tax audit approach to a collaborative, proactive framework based on transparency, trust, and faster legal certainty between tax authorities and taxpayers.
Key foundations of the CTCP include
• A single point of contact and a follow-up team
• Business knowledge and insight
• Compliance with legal tax obligations and equal treatment
• Transparent tax strategy and planning
• Proactive notification and transparent communication
• A robust Tax Control Framework (TCF)
• Faster legal certainty through real-time engagement
• A tailored audit strategy
Recent Updates
Recently, the Belgian tax authorities published an updated version of the CTCP brochure, along with a preparation guide/checklist detailing the requirements for having a “well-defined” Tax Control Framework.
Key Updates in the Brochure
1. Phased Intake of Group Entities: The updated brochure now allows for a phased intake of different Belgian group entities. This flexibility acknowledges the varying structures, activities, sizes, ERP systems, and TCF maturity levels of entities within a group. Even entities not yet onboarded can benefit from a single point of contact from the beginning of the intake process.
2. Target Group – Updated Thresholds: Originally, CTCP participation was limited to very large companies. The new guidelines now allow large companies below the original thresholds to apply, provided they have an effective TCF, emphasizing the importance of a robust TCF.
3. Emphasis on Single Point of Contact: The updated brochure details the role of the coordinator, who serves as a permanent single point of contact, bypassing the need for companies to go through the tax authorities’ contact center.
4. Tailored Audit Strategy: Companies within the CTCP will experience a more tailored audit strategy. The CTCP team will pre-analyze the company’s information and TCF assessment to determine the necessity and scope of audits. This strategy aims to minimize unnecessary audits and ensure efficient resolution based on available documentation.
5. Taxes in Scope – Pillar 2: The scope of the CTCP now includes Pillar 2, which refers to the minimum level of taxation for multinational and large domestic groups, in addition to existing requirements like transfer pricing documentation and cross-border arrangements.
New Checklist for TCF
A new preparation guide provides detailed guidance on building a robust TCF, enabling companies to conduct a self-assessment of their TCF’s maturity. This guide aligns with the OECD’s guidance for co-operative tax compliance and prepares companies for discussions with Belgian tax authorities.
For more details, you can refer to the updated brochure and preparation guide available on the Belgian Federal Public Service Finance (FPSF) website.
Joining the CTCP can provide companies with upfront certainty, reduce the burden of time-consuming tax audits, and support a broader tax transparency strategy. The updated guidelines and preparation materials underscore the importance of a robust TCF and offer clearer pathways for companies to engage proactively with the Belgian tax authorities.
