December 8, 2025

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

Key Points

Royalty payments for trade names are deductible if they fulfill a business purpose, enhancing tax strategies.
The ruling emphasizes that subsidiaries do not need proof of generated business value for such deductions.
Assessment under the transfer pricing provisions of the ITC reinforces the implications for tax authorities.
This decision may influence future royalty agreements and tax deductions under Belgian tax law.],

Abstract

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.

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Cite This Study

Engels et al. (Mon,) studied this question.

synapsesocial.com/papers/694020d72d562116f28fa6d5 https://doi.org/https://doi.org/10.59403/33y9xwj