On November 30, 2022, the law containing various tax and financial provisions was published in the Belgian Official Gazette. With this, the legislator significantly expanded the examination and assessment possibilities of the tax authorities by significantly extending the deadlines involved. These changes take effect as of assessment year 2023 or, in other words, for income years beginning January 1, 2022.

In the area of VAT, the statute of limitations is extended from 3 years to 4 years when a return is not filed or is filed late. Thus, the importance of bringing in documents on time only increases since filing a return one day late automatically carries an extra year of audit time.

With respect to income tax ( corporate/personal income tax), a timely filed return retains the standard 3-year period for examination and assessment, but if no return is filed or a late return is filed, this period is also extended to 4 years. A new deadline of 6 years is introduced for what is considered a "semi-complex return," even if filed on time. By this the legislator means a declaration that contains the following elements:

• returns of taxpayers required to file a local file and/or country report for transfer pricing purposes;
• returns containing exemptions, waivers or reductions in withholding taxes granted under a double tax treaty, the Parent-Subsidiary Directive or the Interest-Royalty Directive;
• returns that report payments to tax havens;
• returns requesting a credit for the flat-rate portion of foreign withholding tax based on a double tax treaty or European directive;
• returns of income captured through reportable cross-border structures under the DAC-6 and DAC-7 directives.

For "complex" declarations, a period of up to 10 years now applies without the need for a fraudulent element to be present. A declaration is considered complex when the following elements are present:

• in the case of a hybrid mismatch within the meaning of Article 2, §1, 16° of the Income Tax Code;
• In the case of undistributed profits arising from an artificial arrangement (within the meaning of CFC legislation, Article 185/2 of the Income Tax Code);
• when filing a return reporting a legal arrangement abroad (Article 307, §1/1 of the Income Tax Code).

The latter is especially important in personal tax where this notification, often unconsciously, is sometimes forgotten.

If the assessment relates only to some disallowed expenses, such as car expenses, restaurant expenses, social benefits, etc., these last 2 deadlines do not apply.

When fraud is involved, the deadlines for both VAT and income tax are also increased, from 7 to 10 years. As a result, accounting documents will now also have to be kept for 10 years instead of the previous 7 years. As compensation, the period within which the taxpayer can file an objection to an assessment has been extended from 6 months to one year.

Thus, we can conclude that late filing of a tax return has major consequences and companies with even a minor international aspect will often face a 6-year examination and assessment period.