The University of Sydney-    Classic Texts in Australian and International Taxation Law

4. Requirements for Selection of Methods and Relative Value of the Various Methods

In principle, allocation is based upon the taxpayer’s declaration, supported by the separate accounts2 and subject to checking by the revenue authorities. If there are no special accounts or if they are not sufficiently trustworthy, allocation may be made empirically. The empirical or comparative method is only used if there are special reasons for doing so and if the taxpayer agrees to it.

The most practical and satisfactory method is taxation in accordance with accounts susceptible of being verified by the Administration. If it cannot be employed, an empirical method offers an alternative solution, although it is not always in accordance with the facts.1

In actual practice, however, the revenue authorities are satisfied with any method of assessment which will furnish as exact an estimate as possible of the profits earned by a foreign firm in Belgium.