Following the remarkable intervention by Alexia Bertrand (group leader of the Open Flemish Liberals and Democrats Open Vld) in the Finance Committee of the Belgian Parliament yesterday, the Finance Minister stated that an evaluation of Pillar2 is necessary and that this topic will be on the agenda of both the OECD and the EU. In his own words : “We must ensure that we do not harm our own businesses”.

In addition to the additional tax burden, the administrative overload in terms of compliance costs could undermine their competitiveness.

As I stated to Bart Haeck in De Tijd [1], a lot of Belgian companies of multinational groups face enormous compliance fees (exceeding sometimes 1mio €), without even mentioning the cost of the staff (in tax/accounting departments) entirely dedicated to this task! And sometimes the outcome is : there is no additional tax to pay under Pillar2!

There is a serious risk of Belgian companies (of MNE groups) relocating to other countries (which are not playing the same game…), which the government does not seem to see (so far), blinded as it is by the expected tax revenues (the scale of which remains highly doubtful : the advance payments made by Belgian companies merely amount to … 60 mio €!). The governments expects 780 mio € per year… 🤔

Hence the question that arises at a time when Pillar 2 is cracking on all sides: will EU countries, or rather some of them, such as Belgium, be the only ones to play the game? Are we really going to shoot ourselves in the foot?

Denis-Emmanuel Philippe 

[1] ‘Minimumbelasting multinationals was goed idee, maar nu stop je er beter mee’ | De Tijd