The new Act, adopted on 10 December 2019, transposes Directive 2018/822 of 25 May 2018 on mandatory automatic exchange of information in the field of taxation in relation to reportable cross-border arrangements in the various tax codes (Income Tax Code [Code des impôts sur les revenus 1992], Various Duties and Taxes Code [Code des droits et taxes divers], Inheritance Tax Code [Code des droits de succession] and Registration Duties Code [Code des droits d’enregistrement, d’hypothèque et de greffe]) so that the Belgian tax authorities have the information needed to take action against aggressive tax practices. It imposes new declaration obligations on tax intermediaries and taxpayers and should allow automatic exchange of information in cross-border arrangements.
When will it be applicable?
The declaration obligation will apply from 1 July 2020, but the Act requires all the relevant arrangements to be declared from the entry into force of the Directive, i.e. 25 June 2018, with retroactive effect.
What must be declared to the tax administration?
In practical terms, all the cross-border arrangements, including certain “hallmarks” of aggressive tax planning, must be declared. Those hallmarks are broadly interpreted and include situations where the main benefit or one of the main benefits, having examined all relevant facts and circumstances, a person may reasonably expect to derive from an arrangement is the obtaining of a tax advantage. Furthermore, some specific hallmarks relate to cross-border arrangements, beneficial owners and transfer pricing.
Who is involved?
All those participating in the arrangements are subject to the declaration obligation. This obligation applies to] any tax intermediaries involved in the arrangements (such as lawyers, notaries and tax advisers). Any aggressive cross-border arrangement known by, monitored by or held by the intermediary must be declared.
Olivier Querinjean, Partner,
Arnout Vaninbroukx, Senior Associate
Lancelot Decaesstecker, Junior Associate
