27.03.2026

Belgium: Updates on the Belgian Pillar 2 Implementation

Belgium has taken further steps in the implementation of the OECD/G20 Pillar 2 rules with the publication of (i) the draft Income Inclusion Rule (IIR) return and accompanying draft instructions, and (ii) Circular 2026/C/41 (addendum), which provides clarification on the use of exchange rates where the presentation currency of the consolidated financial statements differs from the euro.

The release of the draft IIR return represents a significant milestone in the practical rollout of the Belgian Pillar 2 framework. It offers the first detailed insight into the compliance expectations for multinational groups within scope of the Belgian Pillar 2 legislation, particularly those with Intermediate Parent Entities (IPEs) and Partially Owned Parent Entities (POPEs) liable to the IIR in Belgium. The draft return outlines the data requirements, structure, and reporting mechanics that will underpin the new filing obligations. Importantly, the draft is now open for public consultation until 3 April 2026, providing taxpayers with a valuable opportunity to comment on the proposed approach and highlight potential implementation challenges.

In parallel, the publication of Circular 2026/C/41 is a welcome development for groups whose consolidated financial statements are prepared in a currency other than the euro. The Circular aligns Belgian practice with OECD guidance and clarifies the applicable exchange rates for both the conversion of top‑up tax amounts and the assessment of monetary thresholds.

Draft IIR return

The draft IIR return has been aligned as closely as possible with the GloBE Information Return (GIR) and, where relevant, refers to corresponding GIR codes. It is structured into five sections:

Section 1. Identification:
- Section 1.1. Belgian entity information: This section requires the completion of basic identification details of the Belgian entity subject to the IIR, similar to field 1.2. of the draft Belgian QDMTT return.
- Section 1.2. MNE group information:
  - Section 1.2.1.: This field requires information on the Pillar 2 group name, the allocated Pillar 2 group number following the Belgian Pillar 2 notification and the beginning and ending date of the financial year. This information is identical to field 1.3.1. of the draft Belgian QDMTT return.
  - Section 1.2.2.: This field is only required to be filled in when the presentation currency of the consolidated financial statements is not euro. This field also corresponds to field 1.3.2. of the draft Belgian QDMTT return.

Section 2. Determination of the IIR top-up-tax: This section is divided into two parts for which the same information needs to be provided:
- Section 2.1. - Calculation of the IIR for the Belgian entity itself
- Section 2.2.- Calculation of the IIR with respect to a low-taxed subsidiary or JV.

In both cases, taxpayers must provide information on the relevant jurisdiction, subgroup, and any applicable safe harbour. Where no safe harbour applies, details on GloBE Income and the top‑up tax attributable to the Belgian entity must be reported.

Section 3. Prepayments: Disclosure needs to be made on whether any prepayments have been made with respect to IIR top-up tax. This section corresponds with section 6.1. of the draft Belgian QDMTT return.

Section 4. Calculation of the IIR top-up tax: In this section an overview needs to be provided of the calculated top-up tax and the applicable increases in case no prepayments have been made. This section follows the same logic as section 7 of the draft Belgian QDMTT return.

Section 5. Contact person: Contact details of the contact person of the Belgian entity filing the IIR return are requested. This section is identical to section 8 of the draft Belgian QDMTT return.

Circular 2026/C/41 – Exchange rate clarifications

The Circular aligns with OECD guidance on currency conversion rules and provides clarity on three key points:

Exchange rate for converting local figures into the presentation currency: For purposes of converting local‑currency figures into the presentation currency used in the consolidated financial statements, the Circular confirms that taxpayers must apply the currency conversion rules prescribed by the accounting standard underlying the group’s consolidated financial statements. This ensures consistency between the financial reporting framework and the Pillar 2 calculations.

Exchange rate for converting top-up-tax amounts: Following the freedom of choice provided by the OECD guidance, the Belgian tax authorities have opted to use the exchange rate on the last day of the financial year in order to convert the top-up tax amounts from presentation currency into euro. This needs to be determined on the basis of the European Central Bank (ECB) reference exchange rate. This method applies to all top-up-taxes (i.e., QDMTT, IIR and UTPR).

Exchange rate for monetary thresholds: To assess whether the monetary thresholds (e.g., EUR 750 million in two of the four preceding years) have been exceeded, the average December ECB reference rate of the calendar year immediately preceding the start of the financial year must be used.

Key attention points

Several noteworthy elements arise from the draft IIR return:

Filing obligation even in safe harbour situation: An IIR return must be filed even where no top‑up tax is due and a safe harbour applies. For example, section 2.1.6 requires taxpayers to indicate the applicable safe harbour, necessitating a nil return where relevant.

Separate filings for each Belgian IIR-liable entity: Each Belgian entity subject to the IIR must file its own return. Groups with multiple Belgian IPEs may therefore be required to submit multiple IIR returns.

Specific attention point in case of mergers: Where a merger occurs at the time the IIR return is due, the acquiring entity must file two IIR returns if it was already liable to the IIR prior to the merger—one in its capacity as the acquiring entity and a second as a standalone entity, without referencing the merged entity.

GloBE Income reporting requirement: The draft return requires disclosure of GloBE Income for the jurisdiction of low‑taxed entities. The rationale for this requirement is unclear, given that (i) top‑up tax is calculated based on excess profit rather than GloBE Income, and (ii) GloBE Income includes all entities in the jurisdiction, including those irrelevant for determining the Belgian IIR liability.

Electronic filing: The IIR return must be filed electronically via the MyMinfin platform.

Conclusion

Belgium’s latest Pillar 2 developments signal that the first compliance cycle is rapidly approaching—and that in‑scope groups should not wait to act. With the draft IIR return open for consultation until 3 April 2026, MNEs have a brief but important opportunity to provide feedback and help shape the final Belgian framework. At the same time, businesses should begin stress‑testing their data readiness, aligning internal teams, and assessing the impact of the newly clarified exchange‑rate rules. Early preparation will be key to navigating the new reporting landscape with confidence and avoiding last‑minute surprises as Pillar 2 moves from design to enforcement.

Author

Rik Smet

Counsel

Belgium

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Author

Koen Morbée

Partner

Belgium

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