On 14 April 2016, the Belgian Income Tax authorities have published a new list of topics that will be subject to their review in the coming months. Tax payers may expect to be audited or will receive an information request in case they fall under the scope of the following items:
Individual tax payers
Tax audits will focus on:
- the correct application of the special tax status for foreign executives (tax circular letter of 8/8/1983);
- the exemption or reduction of taxes, relating to foreign source income (application of international tax treaties and/or deductions based on internal Belgian tax law);
- inconsistencies, that are showing up when the tax return is processed by the IT systems of the Belgian revenue services or that appear when matching of tax records from multiple sources is performed (including data, received from sources outside Belgium). This covers topics, such as:
- failure to properly report all Belgian and foreign income from professional activities
- failure to properly report all income from properties, located in Belgium or abroad
- tax deduction of gifts without proper justification
Tax audits are most likely in the following cases:
- the authorities will check that payments, made to third parties, are properly identified on tax documents 281. These documents are used by the authorities to identify the beneficiaries of taxable income and to ensure that these persons properly comply with their tax obligations;
- horeca business (restaurants, pubs, hotels, food, catering, …);
- members of a VAT unit to ensure that they properly complied with all obligations;
- compliance with tax obligations in case of liquidation of a company.
Other matters of attention
Tax payers, who fail to properly file their income tax return after having received a reminder to do this, will be more closely reviewed by the authorities. Special attention is paid to those tax payers, who repeatedly have failed to properly file tax returns in the past.
Data mining techniques are used by the authorities in order to identify risk elements, that may indicate improper tax compliance.
Although the tax authorities will put a special focus on the topics, mentioned above, this does not mean that they would not also continue regular tax audits on other matters.