Belgian Transfer Pricing Circular on Pillar One – Amount B

Amount B is a component of the Pillar One initiative of the OECD that aims to simplify and streamline the transfer pricing rules for companies or permanent establishments with baseline marketing and distribution activities. The OECD published its final report on Amount B in February 2024 (“2024 OECD Report”), which is now an integral part of Chapter IV of the OECD Transfer Pricing Guidelines. The Belgian tax authorities have now clarified their position in a new circular letter.

Background

Under the principles of Amount B, qualifying distributors, agents or commissionaires are able to rely on a pre-defined pricing matrix to determine their arm’s length return as tested party in intercompany transactions. Hence, this would no longer require them to have benchmark studies and avoid discussions on the specific margin to apply in the arm’s length range. The intent was to increase the tax certainty and reduce compliance burden for taxpayers. In reality, the justification of the qualifying nature and the calculation mechanism to determine the arm’s length return are not always that easy and straightforward. For more information, see our previous tax alert.
 

New circular letter

The Belgian tax authorities have clarified their position on Amount B in Circular 2026/C/45 (publishing date of 19 March 2026). This circular letter is an addendum to the transfer pricing circular 2020/C/35. The Belgian tax authorities have confirmed that this addendum has a very specific and defined scope. It cannot be used as interpretation for other parts of the OECD Transfer Pricing guidelines. They also expressed that any later adjustment to the OECD report on Amount B of 2024 will be accepted by the Belgian tax authorities.

So far, only a limited number of other countries have expressed their intent on how and whether they will implement Amount B.
 

Application

This addendum is only applicable to intercompany transactions of Belgian entities or permanent establishments with qualifying distributors, agents or commissionaires that are established in qualifying Covered Jurisdictions that meet all the following criteria:

• It needs to be a Covered Jurisdiction as defined by the OECD (see attached);
• With whom Belgium has a double tax treaty; and
• The Covered Jurisdiction has implemented Amount B in accordance with the 2024 OECD Report and subsequent changes.

The definitions of qualifying distributors, agents or commissionaires, as well as exclusions in the circular align to the 2024 OECD Report. The conditions for the transfer pricing method and determination of the pricing also align to the 2024 OECD Report. In case companies apply Amount B, proper documentation of the application is recommended.

In case of mutual agreement procedures or arbitration procedures between Belgium and other jurisdictions, the application of Amount B for in-scope jurisdictions will be evaluated by the Belgian tax administration on a case-by-case basis. For jurisdictions not in scope, Amount B cannot be considered in case of such procedures according to the circular letter.

The guidance included in Circular 2026/C/45 is applicable for transactions as of 1 January 2025.
 

Impact

Companies should review their Belgian intercompany transactions with qualifying Covered Jurisdictions and evaluate their current transfer pricing position for qualifying distributors, agents or commissionaires. A change to Amount B in such cases can be considered but also comes with some additional requirements to document the eligibility and ultimate price applied. In case the current transfer pricing policy largely deviates from Amount B pricing, it is recommended to evaluate the potential risks and strategy, also in view of potential mutual agreement or arbitration procedures.