Changes to the investigation and assessment periods for income tax

The Law of 20 November 2022 has made major changes to the tax assessment procedure, and these changes are not always in favor of taxpayers!

The Law introduces an extension of the investigation, audit and assessment periods for income tax. These periods can now extend up to 10 years, depending on individual circumstances, and this timeframe may change every year.

To ensure that rights of the taxpayers are not infringed upon, the time limit for filing a a claim has been extended from six months to one year. Additionally, there is more good news for taxpayers: any time limits that have not expired by 31 December 2022 will be extended by six months!

It’s worth noting that the retention period for books and records has been extended from 7 to 10 years to allow the tax authorities to carry out its audits.

The updated rules on tax procedures apply as from assessment year 2023 (i.e. income year 2022 or a non-calendar accounting year ending on or after December 31, 2022).

The revised tax procedures can make it challenging for taxpayers to determine when they will no longer be subject to tax audits and adjustments.
For the sake of clarity, the key points of the new system are outlined hereunder.

1. Absence of tax fraud

In the absence of tax fraud, the investigation and assessment periods will now be as follows:

  • The standard investigation and assessment period remains at 3 years.
  • In case of late or non-filing of tax returns, both the investigation and assessment periods will be extended to 4 years.
  • For the following specific international cases, the investigation and assessment period will be extended to 6 years:

For Belgian companies and foreign companies subject to taxation in Belgium that:

– are subject to transfer pricing reporting and required to submit a local file (form 275 LF) or comply with the country-by-country reporting obligation (form 275 CbC); or
– have made payments to “tax havens” (form 275 F).

for Belgian or foreign companies as well as for individuals (although the latter will be impacted less frequently) that:

– request an exemption, waiver or deduction of the withholding tax return on the basis of a double tax treaty or European directive; or
– request a foreign tax credit; or
– are required to declare cross-border arrangements and exchange tax information regarding these arrangements with foreign authorities (outside the EU) under the reporting obligations of DAC6 or DAC7, provided that the amount concerned for a taxpayer exceeds €25,000.

  • For “complex returns”, the investigation and assessment period will be 10 years.

For companies, a tax return is considered “complex” when it involves reporting on:

– a “hybrid mismatch”; or
– arrangements relating to controlled foreign companies (so-called CFCs).

A personal income tax return for individuals is considered complex when it includes the disclosure of “legal arrangements abroad.”

Good news: these extensions to 6 and 10 years do not apply to “normal” non-deductible expenses for which the tax authorities can only conduct control measures within the 3 or 4-year time limit:

– Regional taxes, charges, or fees;
– Fines, penalties, or confiscations of any kind;
– Non-deductible car expenses;
– Non-deductible hospitality and business gift expenses;
– Non-deductible restaurant expenses;
– Non-specific professional clothing expenses;
– Social benefits (including meal vouchers, sports/culture vouchers, and eco-vouchers).

2. Existence of tax fraud

The tax investigation and assessment period for cases of suspected tax fraud, which was previously limited to 7 years, has now been extended to 10 years.

Regarding the investigation period, tax authorities are no longer required to provide evidence of tax fraud to justify extending the investigation period. Instead, they are only required to notify the taxpayer of their intention to extend the investigation period based on the suspicion of tax fraud.

Likewise, the Belgian tax authorities are required to specify the number of years they are investigating for suspected tax fraud.

If you would like us to analyze your situation, please don’t hesitate to contact your tax consultant or tax advisor, or send us an email at