Tax authorities announce targeted audits

A few days before sending out the tax returns for 2017, the tax authorities announce on their website (FR/NL) which groups of taxpayers they will audit more specifically.

For individuals, these are

  • Company directors who deduct their actual business expenses instead of the lump sum deduction. The tax administration suspects that some directors artificially prove more professional expenses in order to pay less taxes. Directors who opt for a lump sum deduction are not subject to control.
  • Owners of buildings that are used by the tenant for his business also risk being audited. If they do not declare that the property is used as an office or for a business, they are taxed on the “cadastral revenue” and not on the real rent, which is fiscally more advantageous.
  • People who pay alimony to someone abroad and deduct this alimony also run the risk of a tax audit. The audit will establish whether the beneficiary actually receives the money and whether there actually is an obligation to pay maintenance.

Companies will also be subjected to stricter audits: do they withhold tax on the salaries of foreign employees who work here for more than 183 days, do the contributions to pension plans stay within the 80% limit, do they correctly recover tax losses from previous years, etc.?

Taxpayers, both individuals and companies, who fail to file their income tax returns, despite a reminder, risk an audit, especially if they are repeat offenders.

Author: Marc Quaghebeur

Marc Quaghebeur is a Belgian tax lawyer with Cabinet DAVID specialising in international tax issues and cross border estate planning. He is a member of the Brussels Bar and the Society of Trust and Estate Practitioners. He

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