What does the government agreement say about combating tax fraud?
When drafting the government agreement of the De Croo I government, it was agreed that the fight against fraud should once again generate a lot of money. Nothing new under the sun in itself. Every new government does this. But will the government also be able to deliver on its forecasts, and if so, how?
Just like the previous governments of the past decade, the De Croo I government is counting on the proceeds of tax regularisation. The secret dream of every Minister of Finance is to match the record revenue of 2013, when 5 billion euros was collected in one year via the Point of Contact for Regularisations (PCR). But were the international parameters not much more favourable back then? And is there really still that much black money left to be regularised?
At first glance, the ambition of the new government therefore seems a bit too high. But is that really the case?
Anyone who reads the government agreement thoroughly will note that the government is not just betting on tax regularisation again, but that there is indeed a well-thought-out plan behind it. After all, all parameters indicate that the government, after having massively focused – via the tax regularisation procedure of the PCR – on the repatriation of wealth held abroad out of sight of the tax authorities, has now taken up the fight against black money in Belgium itself.
It is an open secret that it has long been a thorn in the side of the tax authorities that the success of tax regularisation is mainly limited to foreign wealth. After all, this wealth has become very transparent in recent years, partly due to the Common Reporting Standards which oblige countries internationally to exchange data annually and automatically about non-nationals who hold assets with them. In this way, the tax authorities have for some years been receiving very valuable information about all Belgians who hold accounts in, say, Luxembourg or Switzerland. It is this transparency that has prompted many Belgians to regularise their foreign wealth. After all: anyone who did nothing became a sitting duck.
To this day, this is not the case for Belgians who have always kept their black money in Belgium, nor for Belgians who, under the old law, succeeded in declaring only their income from the non-tax-barred years, and repatriated the capital itself to Belgium without paying a fine or a tax increase.
Well, it is these Belgians who can start getting nervous, because their wealth also threatens to become more transparent.
First of all, the government agreement provides for an expansion of powers for the Central Point of Contact (CPC), which already collects the bank account numbers of all Belgians today. Soon, Belgian banks will also have to inform the CPC annually of the balance per account in addition to the account numbers. The tax authorities can request this information when there is a suspicion of fraud, but also – and this is also new – in the context of so-called data mining (namely: digital research to detect abnormal behaviour based on algorithms). In other words: Belgians who hold their wealth in Belgium, but who cannot provide a clear explanation for the origin of their capital, are likely to end up in the crosshairs of the tax authorities and even the public prosecutor’s office in this way.
Conclusion
Belgians with assets in their own country, the origin of which cannot be demonstrated, would do better to take the government’s intention seriously. Would you like more information or to consult on this topic or on tax regularisation? Contact us.
Also read the interview with Mr Stijn De Meulenaer in De Standaard of 16 October 2020.
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