Intragroup Trade Name Royalties: Recent Transfer Pricing Case Law

In a recent decision, a Belgian court confirmed that royalty payments made by a subsidiary for the use of a trade name are tax deductible where they serve a genuine business purpose, without requiring proof that the use of the trade name generated demonstrable or quantified value. The court distinguished the general cost deductibility rules from the transfer pricing framework, clarifying their respective scope and evidentiary standards.

The court ruling provides useful guidance on the deductibility of intellectual property‑related royalties and on the allocation of the burden of proof in Belgian transfer pricing disputes.