In recent years, the Belgian tax authorities are more and more focussing on the review of specific topics or activities with Belgian tax payers. It is published in advance, which areas of attention have been identified. At the same time tax audits are getting more severe and penalty levels are going up for non compliant tax payers.
Recently, the following topics were revealed, which will be audited in the near future:
Already in the past, the authorities have issued instructions, where they treat the following expenses as non-deductible items (or as benefits in kind):
According to Belgian tax law, a tax inspector can disallow the deduction of those expenses, which are not of a professional nature or tax them on the name of the beneficiary as benefits in kind. The tax authorities are, however, not entitled to judge whether or not it was necessary or appropriate for the tax payer to incur certain expenses.
There is a thin line between this limitation for the tax authorities and the identification of expenses, which can be deemed to be excessive. Your tax advisor will help you in dealing with the upcoming the tax audits and also provide useful up front advice on acceptable business expenditure and on finding the limits for cost deduction for certain specific cost items.