Belgian tax returns filed by electronic means or through an authorized representative can no longer benefit from extended filing deadlines.
Case law found the current practice of different filing deadlines, depending by whom (the taxpayer himself or a representative) or how (on paper or electronically) the tax return is filed, to be in violation of the constitutional principle of equality and the general principles of good administration.
Consequently, a uniform filing deadline can be expected to apply to all Belgian income tax returns as of assessment year 2014 (i.e., personal income tax returns as of calendar year 2013 and corporate income tax returns as of financial years ending on 31 December 2013 or later) without any further tolerances for electronic filings or filings by representatives.
The Belgian Income Tax Code does not provide for specific deadlines for the filing of income tax returns. Each year again, these deadlines are therefore set by the tax authorities and used to be uniform for all taxpayers (subject to ad hoc extensions for specific reasons or force majeure). Little less than 10 years ago and following the introduction of the electronic filing procedure, the tax authorities adopted, however, a more diverse approach that resulted in three different filing deadlines depending on whether the tax return was filed: (i) on paper; (ii) electronically by the taxpayer himself; or (iii) electronically by an authorized representative (e.g., accountant, tax consultant, lawyer, etc.)
Case law refuses different filing deadlines
In its decision of 26 February 2013, the Court of Appeals of Ghent ruled that the paper filing of a personal income tax return after the deadline for paper filings, but prior to the deadline for electronic filings by an authorized representative, must be considered timely. The court followed the taxpayer's reasoning that the application of different filing deadlines violates the general principles of good administration and the constitutional principle of equality.
The tax authorities filed an appeal against this decision before the Supreme Court. In the meantime, they continued, however, their practice and also set for assessment year 2013 three different filing deadlines for personal income tax returns and two for corporate income tax returns.
In its decision of 26 January 2014, the Supreme Court now refuses the appeal of the tax authorities against the above decision of the Court of Appeals. Consequently, it is for assessment year 2014 expected that the tax authorities will have to revert to the old practice as applied until assessment year 2004 of one uniform deadline for all income tax returns, irrespective of whether these tax returns are filed on paper or electronically, by the taxpayer himself or by an authorized representative.
2 All tax returns due by the same date!
Impact of uniform filing deadlines in practice
When moving towards a uniform filing deadline, the tax authorities might choose for a shorter deadline, as applied in the past for paper filings, so as to have sufficient time to process the returns and issue tax assessments (the latter of course being more time-consuming for paper filings than for electronic filings).
This will put pressure on the tax compliance divisions of taxpayers and certain service providers that rely on the extended filing deadlines for electronic filings and filings by mandate to properly manage their workflow. Before the tax authorities applied these different deadlines, the workflow was typically managed through general applications for ad hoc extended filing deadlines as filed by the service providers. The latter practice is, however, no longer accepted by the tax authorities which stipulated in their circular letter of 25 April 2013 to be only open for extensions in individual cases, and underlined that such extension can only be granted for specific valid reasons or in case of force majeure. The administrative commentaries were amended accordingly.
Maybe the tax authorities will now come back on this and revert also from this perspective to their old practice. More clarity on any new approach can be expected in the coming months.
In the meantime, taxpayers should nevertheless prepare themselves to have all sufficient preparations done within a period of less than 6 month after year end in order to make sure that they will be able to meet the new and possible shorter deadline.
Baker & McKenzie's tax team is of course available to assist you in this respect.
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