Last update: 20 August 2013 - 16:00 CET
A general anti-abuse rule has been introduced for social law purposes.
Social law abuse exists when the taxpayer realises, through a legal act or through a qualification of a legal act, one of the following transactions: (i) a transaction whereby, contrary to the law’s objectives, he/she places him or herself outside the scope of one or more social law provisions, or (ii) a transaction whereby he/she, contrary to the law’s objectives, places him or herself within the scope of one or more social law provisions.
In case of social law abuse, a legal act or the qualification of a legal act would not be opposable towards the public social security institutions (without jeopardising the opposability of the legal act or qualification towards other parties), unless it can be determined that the legal subject did not have the intention to place him or herself outside respectively with the scope of one or more social law provisions.
The burden of proof of social abuse lies with the institution or inspector who invokes the non-opposability. The legal subject will only be able to avoid the non-opposability if he/she demonstrates that he/she had no intention whatsoever to, contrary to the law’s objectives, place him or herself outside or within the scope of one or more social law provisions. No subjective intention of abuse is required in the hands of the legal subject for the new SAAR to apply. The “abusive practices” to which the new SAAR could be applied in practice, will be determined by Royal Decree, after consultation from the National Labour Council.
The maximum amount of the non-recurring result-tied bonuses has been increased from EUR 2,430 to EUR 3,100 as of 2013. However, in addition to the already previously applicable employers’ social security contribution of 33%, the bonuses are subject to a 13.07% employees’ social security as of 1 January 2013.
As of tax year 2013, taxpayers also need to mention in their personal income tax return foreign individual life insurance contracts. This obligation applies to all contracts, including the contracts which have been concluded in prior years.
Article 444 of the Income Tax Code is modified as of tax year 2013 to clarify that any tax increase is to be calculated before imputation of the withholding taxes, foreign tax credits or advance tax payments. In addition, the current limit for non-declared income (EUR 620) is increased to EUR 2,500.
Notwithstanding the fact that the tax authorities were expected to "soon" publish a circular letter with practical examples on the application of the new GAAR for income tax purposes (similar to the circulars of 19 July 2012 and 10 April 2013, which provided examples of transactions which could be “caught” by the new GAAR for registration and inheritance tax purposes), such circular letter has not yet been published. In addition, general guidelines would also be issued to the tax inspectors relating to the way in which the new GAAR can be applied and in which situations.
The Law of 11 July 2013 contains a new – and “final” – tax amnesty procedure allowing taxpayers to regularise undeclared income and capital. It also introduces a social amnesty.The new tax regularization procedure applies to regularisation requests introduced in the period starting on 15 July 2013 and ending on 31 December 2013. Tax regularisation under the old procedure remained possible until 14 July 2013.
The new procedure is open to individuals, corporate taxpayers and legal entities subject to the legal entities taxation regime. Civil companies and associations without a legal personality are also entitled to submit a regularisation request. Finally, for tax payers who already filed a regularisation request under the current procedure, it is possible to file a request under the new procedure.
Regularisation can be requested for a wide range of taxes, including among others, income taxes, VAT, registration duties and inheritance taxes.
As opposed to the former tax regularisation procedure, it is also possible to regularise capital originating from certain money laundering offenses, namely (i) severe and organised tax fraud involving complex mechanisms or mechanisms with an international dimension, as well as (ii) abuse of company assets and forgery of documents. No regularisation is possible under the new procedure for capital resulting from other criminal offenses (such as illegal trafficking of arms).
The conditions for the regularisation of undeclared income and capital depend on whether or not the offenses are time barred for tax purposes:
- In case the statute of limitations for tax purposes has already expired, taxpayers have to pay a 35% tax on repatriated capital, regardless of whether the capital originates from “ordinary” or “serious and organised” fraud;
- In case the statute of limitations for tax purposes has not yet expired, the income is subject to:
- the “normal” tax rate increased with a penalty, which amounts to 15% when it concerns “ordinary” fraud;
- the “normal” tax rate increased with a penalty, which amounts to 20% when it concerns “serious and organised” fraud.
Regularisation of social contributions due by the self-employed is also possible under the new law. Only social contributions for which the statute of limitations has not expired yet can be regularised. Upon regularisation, a “supplementary social levy” of 15% will is due. This levy is not tax deductible. In case a self-employed person wishes to file for both kinds of regularisation, regarding undeclared income, the amount of the social levy can be deducted from the income subject to the fiscal levy.
Regularisation requests need to be introduced at the existing “Contact Point Regularisations”. Under the new procedure, the tax payer has to attach a “brief statement” to the regularisation form, providing details about the fraudulent scheme, the capital and income’s size and origin, the period during which the capital and income were generated and the bank accounts which were used.
As a result of regularisation, taxpayers can no longer be subject to further criminal prosecution. This immunity is extended to “accessory crimes” (forgery, abuse of company assets), provided they were associated with the tax crime.
The estimated revenue is EUR 513 Million.
- Law of 11 July 2013 modifying the tax amnesty regime and introducing the regularisation of social contributions (Kamer | Chambre - Staatsblad - Moniteur)
- Royal Decree of 11 July 2013 modifying the Royal Decree of 9 March 2009 establishing the forms to be used in accordance with Article 124 in the program law of 27 December 2005 (Staatsblad | Moniteur).
A series of additional initiatives to combat tax and social fraud are expected to raise EUR 217 Million.
More in particular, the following measures have been introduced to combat fraud.
- “Serious fiscal fraud” has been introduced as a new criminal offense which is sanctioned with imprisonment of up to 5 years and/or a fine from EUR 250 to EUR 250,000 in income tax, VAT and miscellaneous taxes matters. In customs and excise matters, the penalty is imprisonment from 4 months to 5 years. Fiscal fraud is considered “serious” primarily when false documents have been made or used, in presence of one or more of the 13 fraud indicators which are mentioned in the Royal Decree of 3 June 2007, or when the amount at stake is high and abnormal taking into account the activities or the equity (in case of corporate taxpayers) or private wealth (in case of individuals) of the taxpayer;
- The anti-money laundering reporting obligations of financial institutions, banks, accountants, notaries, real estate brokers etc. are expanded from “severe and organised tax fraud” to “serious fiscal fraud”;
- More strict measures are introduced on cash payments such as e.g. by expanding the limitations on cash payments to EUR 5,000 for sales by individuals to traders in precious metals and by expanding the identification requirements to the sales of precious metals that are settled in cash by the client. In addition, within certain sectors (such as e.g. recycling, trade in old or precious metals) cash payments are now prohibited;
- Companies failing to deposit their annual accounts for 3 consecutive years will, as a rule, be automatically barred from the Crossroads Bank.
The Government also intends to submit proposals to simplify the tax rules and procedures to Parliament, with a view to implement concrete measures by 1 January 2014. The Government has also initiated thorough reflection in the joint finance committees of both the House of Representatives and the Senate. This joint committee should reflect on how tax regulations should evolve, bearing in mind the modified institutional context, aiming at a more equitable taxation and a shift from taxes on labour to taxes on capital or environment or other types of taxes.
The following measures have been introduced to improve the assessment and collection of taxes:
- Customs and excise officials are, upon a control on the public road, allowed to request immediate payment of outstanding traffic fines or, alternatively, immobilise the car in case no payment is made (Law of 17 June 2013 aiming at a better collection of penal fines – Kamer | Chambre - Staatsblad | Moniteur);
- Delegation of authority to the King to determine which accounts and contracts must be notified to the National Bank’s central contact point by banks, credit institutions, etc. (Law of 17 June 2013 containing tax and financial measures, Article 30 - Kamer | Chambre - Staatsblad | Moniteur);
- Introduction of the possibility for taxpayers to opt to exclusively receive an electronic (instead of paper) tax assessment notice (Law of 17 June 2013 containing tax and financial measures, Article 25 - Kamer | Chambre - Staatsblad | Moniteur);
- Introduction of the obligation for companies and legal entities to introduce their tax return electronically through BIZTAX, except if these companies and legal entities (or their proxyholder) do not have the means to file electronically (Law of 17 June 2013 containing tax and financial measures, Article 27 - Kamer | Chambre - Staatsblad | Moniteur).
The annual tax on collective investment institutions, credit institutions and insurance companies has been increased from 0.08% to 0.0965% as of 1 January 2013 and to 0.0925% as of 1 January 2014.
In order to comply with EU legislation, the tax credits that are available in case of expansion of the enterprise by own financial means (Art. 289bis, § 1 Income Tax Code) and in case of low-activity income (Art. 289ter Income Tax Code) have been made available to non-residents covered by Art. 244 Income Tax Code (e.g. non-resident taxpayers which have maintained a Belgian residence during the entire taxable period and non-resident taxpayers who earned at least 75% of their total professional income in Belgium).
This measure entered into force as of tax year 2013.
In addition, some regional tax credits (such as e.g. the credit in Flanders for the so-called “win-win” loans) would also be made available to non-residents who earn at least 75% of their professional income in Belgium.
The entry into force of this measure would have to be determined based on an agreement with the Regions.