Belgian Court of Appeal Wipes the Floor with Ambulatory Use of 2017 Transfer Pricing Guidelines – But Not without Testing the Tax Authorities’ DEMPE Function Analysis

Abstract

In this article, the author analyses a case decided by the Belgian Court of Appeal (Ghent) on 8 June 2021, which concerns the application of the DEMPE functional analysis by the Belgian tax authorities on a patent developed and exploited by a Belgian group of companies. The decision and the analysis focus on two questions: first, whether the OECD Transfer Pricing Guidelines (2017) of which the DEMPE functional analysis forms a crucial new addition can be applied dynamically to facts that took place before their adoption; and secondly, whether the tax authorities’ DEMPE functional analysis in the case at hand was correct.