Law of 20 November 2022 on various fiscal and financial provisions gazetted – action points for businesses
The tax procedure reform was gazetted on 30 November and enters into force mainly as of assessment year 2023. Substantial amendments to the investigation and assessment periods as well as to the period for retention of data will apply going forward.
The following exceptions to the normal three-year investigation and assessment period will apply for direct income taxes:
4 years in the event of failure to file a return or for late submission of a return
6 years for cross-border cases
10 years in the case of ‘complex’ tax returns and in cases of fraud
In addition to these prolonged periods, the extraordinary period of 5 years remains applicable in the event of breaches to the withholding tax provisions, in the event that information is received from abroad or in the event of legal proceedings or evidential documents.
For a more elaborate overview, we refer you to our previous newsflash : https://www.pwclegal.be/en/news/major-changes-to-belgian-tax-procedures-in-the-pipeline---news--.html
Moreover, new statutes of limitations will apply for VAT matters.
We would recommend that businesses take the following action:
1. Update retention policies
Along with the extension of the investigation and assessment periods, the retention period for accounting books and other relevant documents for tax purposes will be extended by 7 to 10 years as of January 2023.
It is therefore essential for companies to review their retention policy today as information relating to assessment year 2023 could be subject to a tax audit up until 31 December 2032!
Not only is it necessary to keep accounting documents and books, given the increased application of anti-avoidance measures, we would also recommend that you thoroughly document transactions in terms of the business rationale and economic drivers.
2. Update tax audit policies
Besides the extension of the statutes of limitations, the Belgian tax authorities will now have increased powers to carry out their investigations and to enforce taxpayers’ cooperation. In addition, the planned implementation of a framework for joint audits will intensify international cooperation between tax authorities. A robust and regularly updated tax audit policy combined with training for dedicated staff will enhance companies’ readiness for tax audits and will mitigate the risk of disputes. You can find more useful tips on this subject in the PwC Legal crisis app.
If you are looking to avoid any unpleasant surprises and want to have the latest information, do not hesitate to contact the PwC Legal team.
