2018 Tax Return : Nowhere to Hide

For years, many people thought they could safely “forget” to declare the income they had outside Belgium; the taxman would never find out. The EU Savings Directive was a rude wake-up call as the Belgian tax authorities started enquiring about overseas bank accounts.

And when Belgian banks started reporting to the tax authorities abroad, they thought “Surely, Luxembourg and Switzerland would never do that … “. Even that is a thing of the past.

Common Reporting Standard

The Common Reporting Standard is the world’s answer to FATCA, the American law obliging banks all over the world to report the bank accounts of American citizens’ to the IRS. The Common Reporting Standard goes further; it is a Global FATCA (“GATCA”?).

This year, banks, brokers and certain insurance companies and collective investment vehicles in 102 countries will be reporting about your financial situation and income in 2017 to the Belgian tax authorities.

What information will they receive?

• the numbers of all your bank accounts,
• the investment income before tax: interest, dividends, income from certain insurance contracts, …);
• the proceeds from the sale of financial assets (stocks, bonds, mutual funds, …);
• the account balance or the value of the account or insurance policy;

This is why your bank keeps asking for a copy of your identity card: they need your contact details and your taxpayer identification number (TIN) so that the information ends up in your tax file. And if you have a company or a trust, the bank has to look through it to find the ultimate beneficiary.

Albania, the Maldives and Nigeria will follow suit in 2019 and 2020, and this Global FATCA network will only expand. All offshore financial centres (like Liechtenstein or Panama) are already participating, except for Palau (where is that?). You cannot hide your wealth anymore unless you open a bank account in Afghanistan or Zimbabwe.

The EU Member States have agreed to go even further. Since 2014 they are exchanging other information that they have, e.g. through the tax returns you file there, or employer’s or pension office statement. Your taxman knows that you have:

• income from employment;
• director’s fees;
• pensions;
• life insurance products;
• real estate and rental income.

All this must ensure that you don’t forget to report any income.

Your Tax Return :

• the Guide
• Is this your first time?
• Couples and Children
• When do I need to file?
• on Paper or Online?
• Filing Online
• Filing on Paper
• Help!?
• Checklist
• Box I – Contact Details and Bank Account
• Box II – Your Family Situation
• Box III – Real Estate
• Box IV – Earnings
• Box V – Pensions
• Cross Border Taxation
• Box VI – Maintenance Received
• Box VII – Investment Income
• Box VIII – Maintenance Paid and Losses from Previous Years
• Box IX – Mortgage Payments
• Box X – Other Tax Deductions
• Box XII – Paying your Taxes in Advance
• Capital Gains
• Box XIV – Bank Accounts and Insurance Policies
• Box XIV – Trusts
• Stock Exchange Tax
• Tax on Securities Accounts
• Nowhere to hide
• The Tax Bill
• Appealing the Tax Bill