The Belgian Tax Authorities have recently announced some of their focus areas for 2018 for tax audits. This early warning allows both individual taxpayers and enterprises to ensure compliance with their Belgian tax obligations.
Individuals and enterprises that have not filed tax returns will in any event be selected.
Enterprises can expect to face more scrutiny in relation to the following subjects:
- Companies having failed to withhold wage taxes for individuals assigned to Belgium for more than 183 days;
- Abnormal turnover compared to similar enterprises or fluctuations compared to previous years and other parameters;
- Pension contributions for occupational pension schemes exceed the threshold of the 80% limit;
- Irregularities in relation to carry-forward tax losses; and
- Provisions for future risks and costs.
Individual taxpayers matching following criteria also run a higher risk for a tax audit:
- Individuals claiming tax benefits for alimony payments made to people living abroad;
- Company directors who have claimed a deduction for actual expenses rather than the lump sum amount; and
- Owners of real estate who rent out to people who use the property for professional purposes and fail to correctly report the income in their return.
The transparency on focus areas is done annually so as to stimulate taxpayers to comply with their obligations. Obviously, enterprises and individuals not falling under the above mentioned categories can also be audited. As in prior years, the Belgian Tax Authorities continue to use data-mining techniques to identify risk areas and select taxpayers for in-depth investigations.