VAT revolution for the real estate sector

Letting real estate in Belgium is in principle a VAT-exempted activity (Art. 44, 3, 2 W.BTW).

The down side of this exemption implies that the VAT due by property developers and rental agencies of commercial properties to contractors for new constructions and renovations is not recoverable.

The non-recoverable  VAT is therefore an expense that is often recharged in the rental price.

The summer agreement refers to a change to the current exemption for letting real estate. Concrete texts are not yet available, but the amendment would provide in an optional VAT system.

For lease agreements coming into effect from 1 January 2018, the charge of 21% VAT on the rental price would be possible.

Those who choose for this option will be able to eventually recover the full VAT paid to the contractors.

The application of VAT is an option and no obligation.

Earlier concluded lease contracts are explicitly excluded.

The rented property must also be used for professional purposes (B2B environment). Other tenants like public institutions (if not primarily used for VAT activities), individuals, etc. would not be eligible.

For the tenant is the VAT neutral as he can deduct the VAT charged on the rent. The minister even expects rental prices to fall because landlords will no longer need to recharge the non-deductible VAT as there is none.

This amendment would also imply an administrative simplification as tax structures, such as usufruct or immovable leasing that were built in the past to enable landlords to however recover VAT, will no longer be required.

The reform should also put an end to the competitive handicap vis-à-vis surrounding countries. In the Netherlands and in the UK, property developers have long been able to recover VAT.

Comments:

A VAT unit already provides for deductibility of VAT to the extent that the building is used for the exercise of VAT activities and, in most cases, offers other benefits, such as avoiding pre-financing of VAT on mutual transactions.

The start date of January 1, 2018 immediately raises questions about the fiscal fate in renewal of contracts, the possibility of a revision of input VAT for older buildings for investment within the review period (5 or 15 years depending on the nature of the works) , as well as the impact on registration fees due for such leases.

 

We will of course keep you informed of further developments in this regard.

Cycle to work : would you be happy with a company bicycle or would you rather prefer a company mountain bike?

The legislature has provided in a favorable statute to promote cycling. This favorable statute foresees following benefits:

  1. 23cent / km can be deducted as commuting expense in case the deduction of actual business expenses is claimed;
  2. no benefit in kind needs to be charged (not even for purely private travel) provided that the bicycle is actually used for commuting fully or partly between home and work;
  3. The employer may also intervene in the commuting expenses by granting 23cent / km for the commuting route which is made by bicycle.

All benefits are also cumulative.

There are also benefits for employers:  all costs related to the facilitation of a business bicycle entitle to an increased deduction of 120%. Not only the cost of the provided bicycle, but also the costs of showers and bike are envisaged.

But a bicycle is not to be considered as a vehicle with two wheels and pedals!

For tax purposes is a mountain bike or racing bike not (fully) equivalent to a ‘bicycle’

The 1st and 3rd benefits of the favorable statute remain applicable in case of sport bikes. However, a taxable benefit in kind is allocated to the employee beneficiary  in cases where the ‘bike’ is provided by the employer. This taxable benefit in kind is considered as wage and therefore subject to withholding tax and social security.

According to the Minister of Finance, the 2nd benefit of the favorable statute  is only applicable to city bikes and hybrid bikes (intermediate between a city bike and a mountain bike). The law does not  make such distinction.

Further makes the minister of Finance also a distinction between “pedelecs” (electric bikes whose speed is limited to 25km/h) and “speed pedelecs” (electric bicycles speeding  up to 45km/h).

“Pedelecs” are fiscally treated as bicycles and enjoy of all three possible tax benefits.

 

“Speed Pedelecs” are categorized by the Traffic Code as a “Class B motorcycle”. This qualification is extended to fiscal purposes with as a result that none of the advantages of the favorable statute for bicycles apply to speed pedelecs. The increased tax deduction of 120% for electric motorcycles is also not applicable because the speed pedelec is not purely electrical driven!!

If an employer purchases or leases a “fast electric bike”  and grants it to an employee as a “business cycle”, the employee will be taxed on the actual value of the advantage derived from the free use of the business cycle.

Remarkable is that the taxable benefit in kind for speed pedelecs might be higher than the minimum tax benefit of € 1.280,00 which applies to some company cars with low CO² emissions.

 

VAT advance payments abolished. Is the 20th of the month still important to you?

Individuals and companies who opted for the regime of quarterly VAT declarations, need to consider 5 instead of 12 payments a year going forward.

 

As from April 1, 2017 VAT taxpayers with a quarterly tax return will no longer pay monthly VAT advances. For the sake of clarity, for month taxpayers nothing changes.

The purpose of the abolition of VAT advance payments is to simplify the VAT procedure.

 

This simplification comes down to:

Currently quarter taxpayers must pay VAT advances for the first and second month of the quarter equal to 1/3 of the outcome due of the previous quarter. The payment related to the third month of the quarter is done based on the actual VAT return.

In other words, the arrangement for quarter taxpayers involved monthly payments whereby a settlement of the actual VAT balance took place on quarterly basis.

The simplification implies that the payment of VAT will coincide with the tax return obligation. If you are a quarter taxpayer, you will be paying the VAT on a quarterly basis as well.

 

This simplification does not mean that:

First, you will not pay less taxes. The VAT debt remains the same, you only pay it on quarterly basis instead of through monthly payments.

For some VAT taxpayers will the above result in a substantial payment each quarter.  If applicable, put money aside throughout the quarter to fund the payment.

Second, not all advance payments are abolished. Both month as quarter taxpayers are now required to pay December’s advance. The advance payment arrangement for the fourth quarter will therefore apply to all VAT taxpayers.

Were you quarter taxpayer before 1.1.2017, then you still owe the advances for January and February. The simplification is namely foreseen to enter into force as of April 1, 2017.

 

The 2017’s deadlines for VAT purposes are as follows:

Still questions, email us at info@odb.solutions

Posted in VAT

Financial protection against costs of tax audit

As your accountant and tax adviser we would like to introduce ‘Omnifisc‘. An insurance policy covering tax audits and judicial procedures in relation to income taxes and VAT.

The insurance is not intended to cover the additional tax liability due as a result of the audit.

The insurance covers up to € 30,000.00 of expenses and fees of your accountant, lawyer and bailiffs to conduct the fiscal procedure, of which € 15,000.00 is meant for the administrative phase and € 15,000.00 for the judicial phase.

The premium is tax deductible:

 

It remains difficult to predict if and when a tax audit will take place and how much time it will request. Our fees relating to tax audits (including requests for information, notices of amendment, objections and / or onsite support) are therefore not included in our standard rates. These services are always separately charged at an hourly rate based on the actual time involved.

On the other hand, legislation is becoming increasingly complex and offers less legal certainty. Where it used to be quite clear which approach the tax authorities would take with respect to certain structures, this is no longer the case.

In the search for additional revenues the tax authorities are also asked to make targeted and follow-up tax audits.

In short: the risk of extensive fiscal control, disputes and discussions of the tax administration has increased significantly.

To hedge against unexpected costs such tax audit might involve, you can consider underwriting an ‘Omnifisc’ insurance. For more information you can contact us at info@odb.solutions.

Tax prepayments back in business

Entrepreneurs and professionals (cfr. individual tax payers) and all types of companies (cfr. corporate tax payers) have to make tax prepayments . Start-up companies (natural persons and small companies) are exempt during their first three years of business.

A tax increase is applied when no or insufficient tax prepayments. The purpose of the tax increase is to engage the taxpayer to pay most of the tax liability in the period in which the taxable income is generated instead of delaying the payment until receipt of the tax bill.

Percentage of the tax increase for income year 2016 – fiscal year 2017 is 1.125% (the same as last year).

Internal legislation has been amended  in view the base rate, used to determine the tax increase, never to be less than 1%. Accordingly, the tax increase percentage will automatically be set at at least 2.25% as of 01/01/2017 (fiscal year 2018).

As of the fiscal year 2018 no the tax increase will apply when the calculated tax increase is lower than 0.5% of the tax on which it is calculated or if the amount due is less than 50 euros (currently it is 1% or 25 euros).

Reminder:

Companies, self-employed and professionals whom financial year ends on December 31, need to proceed with the tax prepayment for the fourth quarter of income year 2016 at the latest by December 20ste. Tax prepayments received after the due date by the ‘Tax Office for Prepayments’ are automatically forward to the next period (i.e. first quarter of 2017). Special rules apply to companies whom fiscal year does not coincide with the calendar year and for companies with a financial year of less than 12 months.

 

Reducing social contribution payments

The request to reduce the payment of social contributions can be made now for one, two or three calendar years in one and the same application form. Until now the request could only be filed per calendar year.

The requirement of providing objective proof to justify the reduction remains unchanged and should be provided for every year for which a reduction is requested.

An entrepreneur will however continue to submit annual requests because he usually will not be able to provide objective proof for the reduction of income over several years.

Mandates without payment entitlement can request the reduction of the provisional social contributions for three consecutive years on the basis of the report of the General Meeting or a copy of the Corporate Statutes.

 

No regularization after retirement

As of 2015 an interim contribution is first paid and regularized  two years later with a supplement or recovery as a result.

Now, when you retire and completely stop your self-employment activities, you can ask to waive the regularization under specific conditions.

Waiving the regularization is only interesting in case the balance for the entire period is negative. As the waiving will cancel both any extra payment due or any possible refund.

Encouragement ‘thorough renovation’ of the house

Bart Tommelein Flemish Minister for Energy wants to engage in energy-efficient homes in Belgium. Hereby he introduces the word “benoveren”, which stands for “better renovation”. Within this scope, the Flemish Energy Agency published the brochure “BENOveren: what, why and how” out.

 

“One who isolates his home in several places resulting in a decrease of the power consumption below a certain limit, receives a discount on the property tax. In some cases, the property tax is even avoid,” said the minister in the De Zevende Dag.

Concretely, it would meant that who can reduce their energy level up to E60 does not have to pay property tax for the next five years after renovation.

Even individuals who would not carry out the renovation works at once will be able to make optimal use of the tax rebate following the Minister. “The Flemish government provides in a possibility to borrow cheaply or for free during the next three years so that individuals can renovate”

Roof insulation: end of the tax reduction

The tax reduction for roof insulation will no longer be applicable from January 1, 2017.

A transitional measure is foreseen: who places an order and pays an advance before end of 2016 and actually pays the invoice at the latest on December 31, 2017, will still benefit of the tax reduction.

Insulation grants in 2017: what will change on Flemish level

The reform of the energy grants stood for a while on the program, but now it is a fact : as from 2017 these grants will differ significantly!

As from 2017 the energy subsidies in Flanders change. The Flemish government approved the plans of Annemie Turtelboom Energy Minister.

  1. Individual grants have been adjusted Premiums for roof and glass are decreased, incentives for heat pumps Roof insulation premiums are downsized from six to two
  2. The number of grants is reduced
  3. A new premium to carry out throughout energy-efficient renovations is implemented

 

These changes will enter into force as of 01.01.2017 (date of final invoice). Until 31/12/2016 everything remains the same.

Fiscal measures that will take effect as from the start of 2017:

Source: powerpoint on the budget of the Prime Minister: Click here to view

 

Withholding tax on movable assets increases to 30%

The standard withholding tax rate increases from 27% to 30% by January 1, 2017.

This means, amongst others, that interests paid or credited by a company as of January 1, 2017 will be subject to a 30% withholding tax irrespective of whether the interest relates to a current account (R / C) or to a (long)term-loan and irrespective when the loan is contracted.

Historically increase standard withholding tax rate:

  • since somewhere 80’s: 15%
  • 1 Jan 2012: 21% (Di Rupo’s government)
  • 1 Jan 2013: 25% (Di Rupo’s government)
  • 1 Jan 2016: 27% (Michel’s government)
  • 1 Jan 2017: 30% (Michel’s government)

 

However, the known exceptions are not affected (so-called. vvpr-bis-dividends, Letermebons, etc.). In such cases remains the withholding tax rate unchanged.

The 17% withholding tax rate is increased to 20% if the payment of dividends from the liquidation reserve occurs within the five-year waiting period. This also applies from January 1, 2017, but only on the growth of the liquidation reserves (which are built up for a taxable period associated with assessment year 2018 at the earliest). The increase does not apply to previously established reserves.

For interest on regulated savings accounts that exceed the exempt amount, remain both the rate of 15% and the exemption requirements unchanged for the time being.

Below an overview of the withholding tax tariffs with effect as from January 1, 2017:

  • Withholding tax on regulated savings accounts (above the first exemption of interest of 1,880 euros) remains 15%
  • Withholding tax on dividends from real estate investment trust or regulated real estate company remains 15%
  • Withholding tax on term deposits rises from 27 to 30%
  • Withholding tax on certificates of deposit rises from 27 to 30%
  • Withholding tax on bonds rises from 27 to 30%
  • Withholding tax to other government bonds rises from 27 to 30%
  • Withholding tax on civil loans rises from 27 to 30%
  • Withholding tax to shares rises from 27 to 30%

 

Stock exchange tax

The stock exchange tax is extended to Belgians acting through foreign brokers. Moreover, the current ceilings used to determine the stock exchange tax, are doubled.

This procedure replaces the speculation tax which will be abolished.

It is expected that in the course of 2017, the exchange of financial information between the tax authorities of the EU Member States will be done according to the Common Reporting Standard the Organisation for Economic Co-operation and Development has established. That exchange of information not only refers to interest (opposed to the former Savings Directive) but covers as well dividends and capital gains.

 

Stop back gate for non-taxable internal gains

A technique for withholding tax dodge (i.e. 30% as of 1/1/2017) is the transfer of shares of an operating company into a holding company, followed by:

Step 1: payment of dividends from the operating company to the holding company;

Step 2: a capital reduction in the holding company.

This way, funds from the operating company were paid out at 1.69% rate.

It will be dealt with this situation on the one hand by specific target audits and on the other hand by amending the legislation for the contributions made from 01.01.2017, namely by adjusting the definition of “paid-up capital”.

 

Company cars

Fuel and fuel cards

In addition to the existing taxation on company cars, a supplementary tax is implemented within the scope of the often associated fuel cards. This additional tax is payable by the employer.

The above comes down to a change in the computation of the disallowed expenses on behalf of the company.

The benefit in kind – company car that is taxed on behalf of the beneficiary remains unchanged. The computation of the benefit is based on the CO² emission, fuel type, the date of inscription and the purchase price of the car.

The taxable benefit is determined regardless of whether the beneficiary does or does not receive a fuel card together with the company car.

Instead, the fiscal cost to the company will rise.

Disallowed expenses amounting to 17% will be increased to 40% if fuel costs “associated with the personal use” are fully or partly borne by the company.

 

Personal contribution

The actual taxable benefit in kind (BIK)- company car is reduced when the beneficiary pays a personal contribution.

The personal contribution also provides in a decrease of the disallowed expenses on behalf of the company given that the basis for calculation, i.e., the taxable benefit in kind, decreased or is annulated.

The computation base is now changed from the ‘taxable’ to the ‘in principle’ taxable benefit.

By disregarding the “personal contribution”, the company will continue to be taxed at a disallowed expense of 17% or 40% even in those cases where there is no actual taxable benefit on behalf of the beneficiary (due to personal contributions).

Both measures enter into force on January 1, 2017

 

Mobility Budget

By April 2017 a framework is to be worked out which will enable employees, whose salary package includes a company car (with or without fuel card) and in agreement with their employer, to replace the company car by:

– a mobility budget

– or in the form of additional net pay.

The option chosen is to be treated similarly as the company car regime from fiscal and para-fiscal point of view. The purpose is budget neutrality for all the individual employer, the individual employee and the government.

The modalities are still to be worked out.

 

How to calculate the BIK?

The taxable benefit for workers and managers rises in 2017 as the CO2-emission reference has been reduced resulting in an increase of the CO2 percentage used for the calculation of the BIK.

The taxable BIK – company is determined based on a lump-sum basis since January 1, 2012 in accordance with the following formula:

(Catalogue value * degressivity coefficient) * 6/7 * CO2 percentage

The Royal Decree of November 24, 2016 (B.S. December 3, 2016) fixed the reference CO2 emission for 2017:

  Diesel Benzine, LPG en aardgas
2012 95 gr./km. 115 gr./km.
2013 95 gr./km. 116 gr./km.
2014 93 gr./km. 112 gr./km.
2015 91 gr./km. 110 gr./km.
2016 89 gr./km. 107 gr./km.
2017 87 gr./km. 105 gr./km.

 

Solidarity Contribution

The lump-sum solidarity contribution is calculated per vehicle the employer directly or indirectly provides to its workers (and this regardless possible employee’s contribution).

The charge takes place on monthly basis and is based on the CO² emission and fuel type of the relevant company car. The solidarity contribution will be computed as from January 1, 2017 as follows:

Vehicles Formula
 Petrol CO2 known: [(Y x 9 EUR) – 768] : 12 x 142,46/114,08
CO2 unknown: [(182 x 9 EUR) – 768] : 12 x 142,46/114,08 = 90,54
 Diesel CO2 known: [(Y x 9 EUR) – 600] : 12 x 142,46/114,08
CO2 unknown: [(165 x 9 EUR) – 600] : 12 x 142,46/114,08 = 92,10
 LPG [(Y x 9 EUR) – 990] : 12 x 142,46/114,08
 Electric 26,01 EUR per month (= minimum contribution)

Y is the CO2 emission in grams per kilometer, as stated in the certificate of conformity or in the compliance record of the vehicle, or in the database of the service for the registration of vehicles

Tax shelter for start-up companies

Private individuals can enjoy a tax reduction of 30 or 45% if they invest directly in the capital of start-up companies. A company can raise a maximum of €250,000 in this way over the course of its existence. The investor may invest a maximum of €100,000 per year. The tax shelter applies for investments that are implemented as of 1 July 2015.

Who qualifies as a beneficiary company?
Conditions for the beneficiary companies
This measure is addressed to small companies that meet the following cumulative conditions:
• It must be a domestic company or a company from the European Economic Area (EEA) that possesses a ´Belgian establishment´ in Belgium. The company may have been set up at the earliest on 1 January 2013.
• The company may not have been set up within the framework of a merger or splitting of companies, since in these cases it is not a start-up company.
• The company may not yet have, in the past, implemented a capital reduction or paid out dividends.
• The company does not form the object of a collective insolvency proceeding nor does it find itself in the conditions of a collective insolvency proceeding.
• After the payment of the sums by the tax subject, the company may not have received more than €250,000 of tax-incentivised contributions over the course of its existence. This amount is not indexed.
The company must meet the following conditions during a period of 48 months following the payment of the shares. If these conditions cease to be fulfilled during this period, the tax reduction will be partially revoked:
• The company may not be an investment, cash pooling or financing company.
• The company may not be a ´real-estate company´.
• The company is not listed on the stock exchange.
• The company may not use the amounts received for distributing dividends or purchasing shares, nor for extending loans.

Definition of a “start-up company”
The investment must take place on the occasion of the incorporation of the company, or on the occasion of a capital increase within 4 years after its incorporation. In both cases this involves companies that were set up on 1 January 2013 at the earliest. A company is deemed to be incorporated:

• on the date of filing of the deed of incorporation with the Clerk´s Office of the Commercial Court;
• or on the date of a similar registration formality in another member state of the EEA.
When the activity of the company consists of the continuation of an activity that was formerly exercised by a natural person or some other legal entity, the company is deemed to have been incorporated at the time of the first registration in the Crossroads Bank for Enterprises by that natural person, respectively of the filing of the deed of incorporation of that other legal entity with the Clerk´s Office of the Commercial Court or of the fulfilment of a similar registration formality by that natural person or other legal entity in another member state of the EEA.
Definition of a “small company”
For the assessment year that is associated with the taxable period in which the capital contribution is made, it must be a small company (as defined in §§1 to 6 of article 15 of the Companies Code) which for the most-recently closed financial year, exceeds no more than one of the following criteria:
• annual average of the staff: 50 employees;
• annual turnover, exclusive of VAT: €9,000,000;
• balance sheet total: €4,500,000.
If more than one of the criteria are exceeded or are no longer exceeded, this only has consequences if it occurs in two successive financial years. The consequences then enter into effect as of the following financial year.
The criteria must be looked at on a consolidated basis if this is a parent company or a company which belongs to a consortium. If no accounting consolidation is drawn up, one can opt for an alternative consolidation: increase of the criteria by 20%.
A company that has just started its activity, and thus does not have these figures, must estimate the criteria in good faith at the beginning of the financial year.

Definition of a “micro-company”

A micro-company (as defined in article 15/1 of the Companies Code) is a small company with legal personality which, on the date of the annual closing, is not a subsidiary or a parent company and which exceeds no more than one of the following criteria:
• annual average of the staff: 10 employees;
• annual turnover, exclusive of VAT: €700,000;
• balance sheet total: €350,000.
There are no limitations regarding the sector of activities in which the company is active. In principle, non-profit associations are not subject to the corporate income tax.
You can find more details about these conditions on the Finance website.
Who qualifies as an investor?
The investor is a natural person who invests “directly” in the company, via a crowdfunding platform or via a starter fund, and must meet the following conditions:
• Both the national residents (subject to the personal income tax) and the non-national residents (subject to and regularised in the taxation of non-residents, natural persons) are intended.
• The investor is obliged to hold the shares on which he has paid in for a minimum of 4 years (not applicable e.g. in the case of a bankruptcy). In the event of a voluntary exit during the first four years, the tax benefit will be repaid in proportion to the number of months between the withdrawal and the 4th year.
• Both the family members of the founders and the employees of the company can obtain this tax benefit if they invest in the start-up company.
• The contribution of capital by the manager himself or the directors of the company cannot qualify for application of the tax shelter arrangement. This covers the directors, business managers, liquidators, those in similar positions and independent managers. This exclusion also applies to persons who indirectly exercise a management position as permanent representative of another company or through intervention of another company of which these persons are shareholders.
The investor can invest a maximum of €100,000 per year via the tax shelter arrangement. The maximum participation in the capital that qualifies for the tax benefit amounts to 30%. If this threshold of 30% is exceeded, the tax reduction is limited to an investment in the amount of the first 30%.
Amount of the tax benefit for the investor

For a direct investment or investment via a crowdfunding platform (recognised by the FSMA) the tax reduction depends on the size of the company at the time when the funds are raised:
• the tax reduction amounts to 30% of the invested amount in SMEs;
• the tax reduction amounts to 45% of the invested amount in micro-companies.
The tax reduction is neither refundable nor transferable.
For an investment in a starter fund, the tax reduction will apply in the income year in which the fund made its investments. The tax reduction amounts to 30% of the invested amount in the start-up compartment.
In order to qualify, the starter fund must meet certain conditions:
• the fund must have a special compartment for investments in start-ups;
• at least 80% of this compartment must be invested in start-ups that meet the criteria of the tax shelter;
• the fund must be approved by the FSMA.
The tax reduction is neither refundable nor transferable.
Currently, only direct investment is possible. A number of formalities still have to be clarified with regard to the starter fund and the recognition of crowdfunding platforms by Royal Decree.
Additional conditions
• The investment must take place in registered shares that are newly issued by the company on the occasion of its incorporation or of a capital increase.
• The contribution must be made in money. In-kind contributions are thus impossible, as are debt securities and other financial instruments (options, warrants, etc.).
• The investment must take place:
o within 48 months of the incorporation of the start-up company;
o or on the occasion of a capital increase within 4 years after the incorporation of the company. Here one looks at the date of the subscription to the capital increase, not to the date of the actual payment.

• If you dispose of the shares of a start-up company within 48 months after their purchase, the tax reduction will be partially revoked.
• Sale of currently-existing shares does not qualify.
• A company can raise a maximum of €250,000 via the tax shelter arrangement during its existence.
• No specific conditions are imposed with regard to how the monies raised are spent. However, these monies may not be used to pay dividends, acquire shares of other companies or furnish loans.
Application procedure
The tax reduction is only retained on condition that the tax subject, in support of his income tax returns over the next 4 taxable periods, furnishes proof that he still holds the involved shares or rights of participation in a recognised starter fund. This condition no longer has to be met starting with the taxable period in which the tax subject shareholder or participant in the fund has died.

Auditor may now also inspect data you store in the cloud

If you, as a tax subject, receive a visit from an auditor, you must allow him to look through your books and records if he asks to do so.
What about electronic data?

These days, tax subjects often keep such documents on a computer or server. Such electronically-stored documents may today already be inspected by tax officials.
Inspection in the cloud

In order to also harmonise the right of inspection of the officials with this evolution, the Programme Law of 1 July 2016 amended article 315(b) of the 1992 Income Tax Code – which regulates the right of inspection – by adding that the obligations set forth in this article (= preserve the documents and allow them to be inspected) also apply when the data that the administration requests exist digitally in Belgium or abroad. In other words, the auditor can also inspect data in the cloud.
A similar adaptation was made in the VAT Code so that the VAT officials receive the same power as well.
Starting when?

The new measure applies as of 14 July 2016

What tax audits to expect in 2016?

You might be the target of an audit. When do you run an increased risk?
You’re a private individual and you find yourself in one of the following situations;
• the special assessment system for foreign executives applies to you;
• he/she declared that he/she is entitled to a tax reduction for revenues of foreign origin;
• the automated processing of the return reveals that:

o he/she did not declare all of his/her professional income, Belgian and foreign,
o he/she did not make a declaration of an immovable property of which he/she is the owner in Belgium or abroad,
o he/she deducts gifts without possessing a tax certificate.
You are an independent manager and prove your expenses
You have a company
The company might be audited if:
• it, as a debtor of incomes, did not correctly and completely fill in the 281 tax forms, as a result of which the recipients cannot be identified;
• it operates a business in the hotel, restaurant and cafe sector and does not fulfil the obligation to use a registered POS system;
• as a VAT unit or as a member thereof, it has not complied with specific VAT obligations;
• during liquidation a presumption exists that not all tax levies were paid for certain liquidation transactions.
As in previous years, tax subjects who – despite the fact that a reminder was sent to them – did not file their tax return, will be audited. Particular attention will be paid to tax subjects who have already repeatedly failed to file a return.
The citizens and companies that we audit will be selected on the basis of indicators that point to a heightened tax risk. For citizens, the automated processing of the return can lead to a selection for auditing any irregularities.
Besides these specific points of concern, the FPS Finance naturally conducts other audits of the tax situation of citizens and companies.