We noticed that lately the Tax authorities, in a coordinated effort, addressed notifications of ex-officio assessment to corporate taxpayers that did not yet file the corporate income tax return for Assessment year 2019 or that filed the return late.
If no return has been filed yet, the company can be assessed on a lump sum basis, or data available to the tax authorities through VAT and payroll filings can be used to determine a taxable profit.
If a return has been filed late, it is possible that certain deductions (tax losses, notional interest deduction…) are denied, obviously resulting in a corresponding increase of the taxable basis.
From a tax procedural point of view, the burden of proof is reversed. The Belgian tax authorities can increase the tax due by a fixed additional tax (ranging from 10% to 200% in accordance with the nature and seriousness of the infraction). The Belgian tax authorities can also impose an administrative penalty of EUR 50,00 up to EUR 1.250,00, for every infraction.
Please be advised that even if no tax increase and/or penalty is assessed considering that it is the first infraction without intent to harm, a future request for an exceptional extension for filing would likely be denied. Furthermore, in the event of a similar future infraction, a tax increase/penalty will not be waived a second time. If an increase/penalty has been applied before, the “next level” sanction is likely to be imposed.
Considering the possible adverse consequences, it is highly recommended to duly review the notification and take the required action to assure a timely reply, i.e. within 1 month, counting as of the 3th working day following the date of sending mentioned on the notification. In the absence of filing, the completed tax return package should be enclosed if possible, by any means.
Upon receipt of the corporate tax assessment, the taxpayer has six months to lodge an administrative appeal if the taxable basis is not acceptable or if the final approved annual accounts and corporate legal documentation have become available meanwhile.
For more insights and support, contact your regular PwC advisor (or Karl Struyf or Lieven Schoonjans).