• Will the tax authorities soon be able to go back 10 years in the event of fraud?

Will the tax authorities soon be able to go back 10 years in the event of fraud?

19 July 2022

The amended proposal of Finance Minister Vincent Van Peteghem gives the tax authorities new investigation periods of ten years in the case of fraud and six years in the case of cross-border tax returns.

The extension of the investigation, assessment and retention periods is part of the federal government's second action plan against tax and social fraud.

Specifically, the basic term remains three years. This means that the tax authorities can check the tax returns of the previous three years if an irregularity comes up and issue an (additional) tax assessment for those previous years. For tax returns that were submitted late or not at all, the period becomes four years.

For complex tax returns with activities abroad, a new term of ten years would initially apply but, after much criticism, this term was reduced to six years. This term would also apply to reportable cross-border arrangements, Belgian umbrella companies of multinationals and Belgian companies that are part of an international group. The intention here is to give the tax authorities more time to audit, among other things, transfer prices within the group.

For fraud, the term will be ten years instead of the current seven years. This period will also be applied to offshore constructions, hybrid mismatches and companies subject to CFC rules.

We have to wait for the further legislative process before all this takes effect. Stay tuned for further updates!