Belgian Court Rejects Tax Authorities’ Use of Transfer Pricing Principles to Deny Deduction of Royalty for Trade Name Use

A Belgian court ruled that royalty payments for the use of a trade name by a subsidiary are tax deductible if they serve a genuine business purpose, and does not require proof that the use of the trade name generated actual quantified value. The decision highlights that royalty payments may be assessed under both the transfer pricing provisions in articles 26 and 185(2)(a) of the ITC and the general deductibility rule in article 49 of the ITC.