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Special case: Focus on ex-post operating results

Frequently observed

  • In practice, tax inspectors tend to have a very strong focus on the operating result of companies - be it the Belgian audited company or the intercompany counterparty depending on the transaction - irrespective of the characterization or transfer pricing method applied.

  • In cases where the CUP or Resale Minus Method has been applied, tax authorities often attempt to test / make adjustments to the transaction by using the TNMM, without demonstrating in sufficient detail the method applied by the taxpayer would not be acceptable.

Why is this problematic?

  • Where taxpayers have selected the most appropriate transfer pricing method and have documented the application of the method in sufficient detail, this should not be disregarded by tax authorities.

  • As taxpayers have deep knowledge of the industries in which they operate and transactions that may occur in this industry, we strongly believe that tax authorities should be open-minded towards the method applied.

  • The fact that certain methods (such as the CUP or Resale Minus) can be rather complex when comparability adjustments are made, should not result in the rejection of a method as such and it should be kept in mind that for certain transactions, only a very limited amount of comparable data can be found.


  • Have appropriate documentation to support the transfer pricing method that has been applied

  • Assure the tax authorities follow procedural aspects and do not accept testing on an operating level without being presented with a detailed rejection rationale of methods that have been applied


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