New law lengthens investigation and assessment periods as from assessment year 2023
The law containing various tax and financial provisions has been published in the Belgian Official Gazette on 30 November 2022. Headline of the law is the lengthening of investigation, assessment, objection, and retention periods.
- When the tax authorities want to modify a tax return filed on time, the assessment period remains three years.
- In case of no or a late tax return, the assessment period becomes four years (instead of three).
- When the tax return contains an international element, an assessment period of six years applies. The international element includes (exhaustively) transfer pricing documentation, payments to tax havens, foreign tax credits, exemption or reductions of movable withholding tax based on a tax treaty or EU directive and information received by the tax authorities in the context of DAC 6 and DAC 7.
- In case of a complex tax return, a new assessment period of ten years applies. A complex tax return is limited to the cases where a hybrid mismatch, a controlled foreign company (CFC) or a legal construction is involved.
- The above-mentioned new assessment periods of six and ten years do not apply in case there is only an assessment on certain disallowed expenses (such as car or reception expenses).
- In case of fraud, the assessment period also becomes ten years (instead of seven).
The investigation periods are adjusted in parallel to the assessment periods. Prior notification is necessary to apply the investigation period in case of fraud: prior notice of presumptions of fraud based on indications of fraud should then be given on pain of nullity of the assessment.
The retention period during which taxpayers must retain the necessary documentation is extended from seven to ten years.
The period during which a claim against assessment can be filed is extended from six months to one year.
Entry into force
The measures enter into force as from assessment year 2023. As an exception, the lengthening of the objection period enters into force as from 1 January 2023. For earlier assessment years, the previous regime continues to apply.
For VAT purposes, the retention period is also extended from 7 to 10 years.
The statute of limitation for the collection of VAT becomes:
- in case of no or late return: 4 years
- In case of fraud: 10 years
These measures apply to VAT due as from 1 January 2023. VAT due before 1 January 2023 remains subject to the previous regime.
Other measures in the law
The law also includes the following selected measures:
- Harmonization of late payment and moratorium interest in function of the legal interest rate in tax matters. For 2023, the legal interest rate is 4% resulting, for the purposes of income taxes, in a late payment interest of 4% and moratorium interest of 2% and, for the purposes of VAT, in a late payment interest of 8% and moratorium interest of 6%.
- The tax authorities can impose a penalty payment for obstruction of the exercise of investigative powers, including in the case of an investigation upon request of another State (for both income taxes and VAT)
- The tax reduction for the installation of electric charging stations is increased from 1.500 to 1.750 EUR (as from 1 January 2022) and even to 8.000 EUR for “bidirectional” charging stations (as from 1 January 2023).
- Non-justified costs and hidden gains subject to the secret commissions tax are non-deductible expenses (as from 10 December 2022).
- Introduction of a refundable tax credit for the increase of lump sum mileage allowance for business trips between 1 March 2022 and 31 December 2022.