Economic Recovery plan – Upcoming tax measures – changes to the secret commissions’ tax

Nicolas de Limbourg 14 February 2013


Following our HRS Headlines of 20 October 2011 and 16 November 2011, the pre-draft tax bill of 7 February 2013 dealing with sustainable development provides an additional possibility to avoid the special tax of 309% charged on income that is not properly reported.

This additional possibility can come into play when the following conditions are met: (1) the benefit has been taxed in the hands of the beneficiary, (2) the beneficiary fully agrees with the taxation and (3) the assessment notice has been issued within the 3-year assessment period.

In the future, 3 ways to deal with secret commissions may be legally possible:

  • The general rule: implementation of the special tax of 309%, both the special tax as well as the secret commission will be tax-deductible costs for the company.
  • The first exception: no secret commissions’ tax will be applied when the company demonstrates that the recipient duly and timely reported his taxable remuneration in his individual tax return. The secret commission will still be a tax-deductible cost for the company.
  • The second exception: when the recipient did not duly and timely report the taxable remuneration received, but, with his consent, a tax charge is levied within an assessment period of 3 years on the income not properly reported, no secret commissions’ tax will be applied. The commission itself will qualify as a disallowed expense for the employer.