As of 1 August 2016, new specific legislation on fiscal regularisation entered into force in Belgium. A specific tax levy is provided for the regularisation of undeclared income and undeclared capital.

No deadline is foreseen in the legislation. However, as of 2017, the regularisation will be more expensive every year.

Regularisation of income tax

The new law is a federal law that regulates the regularisation of evaded income tax. The legislation is not applicable for evaded inheritance tax. Inheritance tax falls under the authority of the Regions.

Non-prescribed capital income for income tax purposes

For levying income tax over capital income, a seven year fiscal limitation period is the standard.

Taxable capital income that is not prescribed during 2016 (interest and dividends earned as from 1 January 2009) can be disclosed at the normal income tax rate of the income year, i.e. at a tax rate of 15% or 25% for interest, and 25% for dividends.

As a sanction, a penalty of 20 percentage points applies. This means that the total tax burden equals up to 35% or 45% for interest and 45% for dividends.

The penalty will increase every year as from 2017:

  • In 2017 up to 22 percentage points;
  • In 2018 up to 23 percentage points;
  • In 2019 up to 24 percentage points; and
  • In 2020 up to 25 percentage points.

No interest for late payment is due according to the law.

Prescribed capital for income tax purposes

Prescribed capital during 2016 (in principal the capital on 31 December 2008) can be disclosed at a uniform tax rate of 36%.

This uniform tax rate will increase every year as from 2017:

  • In 2017 up to 37 percentage points;
  • In 2018 up to 38 percentage points;
  • In 2019 up to 39 percentage points; and
  • In 2020 up to 40 percentage points.

No interest for late payment is due according to the law.

Example

A Belgian resident holds a foreign bank account in 2016 with a total balance of 150.000 EUR. The account has never been reported in Belgium. No income tax over the capital income was paid in Belgium.

The balance of the account on 31 December 2008 was equal to 100.000 EUR. The increase with 50.000 EUR consists of dividends.

The financial cost of the regularisation is in principle 36.000 EUR (36% over 100.000 EUR) over the prescribed capital and 22.500 EUR (45% of 50.000 EUR) over the received dividends.

The total cost of the regularisation equals 58.500 EUR.

Regularisation procedure

The regularisation notification must be submitted with the “Contactpunt regularisaties” in Brussels through a specific declaration form that hasn’t yet been published in the Belgian Official Gazette.

The notification must be submitted with the necessary attachments, including a fraud scheme, as evidence of the capital income and prescribed capital.

After treatment of the file, the taxable person receives a written request to pay the regularisation tax within 15 calendar days. After payment, the taxable person will receive a regularisation certificate.

Immunity from criminal prosecution

The legislation foresees, after payment of the tax, an immunity from criminal prosecution for the person submitting the regularisation notification.

Declaration form

We will inform you once the declaration form for regularisations is published in the Belgian Official Gazette.