Individuals, who do not reside in Belgium, are required to file a Belgian non-resident income tax return in case they earn income, which is taxable in Belgium.
This is a very simple statement, but tax payers and their tax consultants can have a tough time to succeed in actually meeting this obligation. Indeed, it appears in some cases, it is pretty difficult to obtain a valid tax form from the tax authorities.
One would expect tax authorities to be very eager to help tax payers to file their tax returns by establishing an easy procedure for obtaining a tax form or to provide an easy web tool for non-resident tax filing.
For resident tax filings, in many cases, one has access to the Tax-on-Web (TOW) system to do a resident tax filing. The system is based on a tax payer identification by means of his so-called ‘national number’ (generated by the commune when registering as a local resident). Even for residents, there are, however, regular difficulties with TOW filing.
The first problem is that one may have to use a card reader and electronic ID card to get access to the system (to avoid to have to request a token). Each ID card has a PIN code, issued by the commune when the card is generated. Unfortunately most individuals tend to forget their PIN code after a while, so they need to revisit the town hall (and wait somt time) to get a new code to access TOW.
In several cases, TOW filing is not even possible, such as for example:
For non-resident tax payers, electronic tax filing is often not a valid option, especially when they are not registered with a Belgian commune (which is logical since they are not residing in Belgium). The procedure for obtaining a TOW registration is just as difficult as the one for requesting and filing a paper tax return. Consequently most tax payers continue to opt for paper tax filing.
Tax forms (electronic or on paper) are only issued in Dutch or French language. Many foreign tax payers are simply blocked by this language limitation to be able to properly respond to the forms. An English language capability to facilitate the communication between authorities and tax payers could solve many practical issues.
For resident tax payers, local tax offices nowadays even offer assistance to tax payers, who can visit the authorities to have their tax return prepared and filed. For non-resident tax payers, such facility is not available.
As electronic filing is most often not a good option, one can request a traditional paper tax return with the non-resident tax office. Writing a letter to the tax authorities is not a good idea and may be disregarded by them. Instead, one must complete a web form. This form results in several issues, however:
Even morer hurdles exists for non-resident tax payers:
It is true that the easy delivery of tax forms (in the past, one could easily obtain a blank tax form or file a tax return on a PDF format) can result in some difficulties for the tax authorities. It may be difficult for them to properly identify the tax payer (for example to avoid double tax filings to occur or to avoid misunderstandings regarding the correct spelling of the name of the tax payer).
From the observations, mentioned above, it is clear that proper tax filing can quickly become a problem and can even lead to tax disputes, especially when the tax payer is punished for late tax filing (penalty or ex officio procedure for assessing the taxes).
An interesting case came before the Court of Appeal of Brussels (case nr. 2011/AR/405, 25 January 2017).
The tax payer did not receive a non-resident tax form for income year 1999 (tax year 2000). In order to meet his obligations. He sent a document by fax to the tax office, in which he reported his income. This document was not made on an official format and did not include the proper tax codes for the various items in the tax return. This tax filing by fax was done on 11 October 2000.
The tax authorities did not accept the fax as a valid tax return and applied the ex officio taxation procedure to the disadvantage of the tax payer. The authorities indicated that a tax payer, who does not receive a tax form has the obligation to request a tax form with the competent authorities as required by article 308, § 3 of the Income Tax Code.
The template for the non-resident tax return for income was published in the Belgian State Gazette on October 2000 (Royal Decree of 22 September 2000). When the tax payer sent his fax on 11 October, the tax authorities could therefore have reacted and could still have issued an official tax form to the individual with a request to use the proper document.
The Court of Appeal notes that the tax authorities did themselves not properly apply the law. Indeed, in the law, it is stated that the tax payer, who does not receive a tax form, must request a form before 1 June of the year. It is clear that a tax payer can never meet this requirement due to the fact that the authorities each year are so very late to publish the proper form (well after 31 May).
The law does not cover the actual situation, where the tax form is not published on June 1. Therefore the court did not accept the arguments of the tax authorities when they were referring to this section of the law.
When looking at the content of the tax filing, the court noted that the fax of the tax payer contained all information, needed by the tax authorities to properly assess the taxes. By consequence, the court decided that the fax is to be treated as a valid tax return.
The court decision gives food for further thought:
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Non-resident tax payers in Belgium – it can be hard to get a tax return filed
Non-resident tax payers in Belgium – it can be hard to get a tax return filed
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- tax payers, who emigrate out of Belgium (to file a special departure tax return)
- death of a tax payer
- the tax payer does not get a clear receipt of his request with proper identification and dating of the request. Receipt confirmation is truly minimal and can easily result in misunderstandings;
- the tax authorities have an excessive time delay for responding to an electronic request for a tax form; it is not unusual for the tax payer to have to wait more than one month between the application date and the date when the tax form is sent; contacting the authorities by telephone does most often not result in a better outcome.
- forms most often are sent directly to the tax payer, even in case there is a known tax consultant to represent the individual. As the forms are only sent in Dutch or French language, many of them get lost each year.
- tax authorities only send a tax form once; in case the form for any reason does not reach the tax payer they often refuse to issue a second form.
- forms are sent extremely late in the year and there is a short period of time for tax filing (usually only 5 weeks after the sending date of the form); non-resident tax payers have a much shorter tax filing window as compared to resident tax payers. This short deadline also overwhelms tax advisors, who in general only have 3 to 4 weeks to do all tax filings for all of their clients.
- why does a tax payer have to start a dispute with the tax authorities on the simple matter of sending a proper tax form or communicating on tax data, provided by the tax payer?
- it is hard to understand why the dispute lasted such a long time (more than 15 years). Would it not have been easier and cost efficient for the authorities to simply accept the tax filing or to make a settlement with the tax payer and avoid a court case?
- use of English language in communication with non-resident tax payers will eliminate many misunderstandings and enhance proper tax compliance.
- the timing for the publication of the official tax form for non-residents is a real problem, existing for many years. Accelerating the publication by 6 months to align the tax filing procedures with resident tax payers will make life easier for all parties involved; the tax authorities further gain 6 months to audit tax filings
- can electronic tax filing procedures for non-resident tax payers and their tax consultants not be made somewhat easier?
- it can help if paper tax forms are quickly issued following the request by the tax payer; if 2 forms would be accientally released for the same tax payer, this is likely not to result in major tax issues, especially as non-resident tax filing is now organized in a single office (in the past there were 5 offices, which was more difficult for the coordination of the work).
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