2023-11-13 02:00:31
The tax authorities will intensify controls relating to exemptions from payment of withholding tax. The granting conditions have been tightened and the penalties are raining down.
In Belgium, the Income Tax Code recognizes twelve types of exemptions from the payment of professional withholding tax (PP)one of the most advantageous aids for public and private organizations that can benefit from it.
These exemptions represent a total budget of nearly 4 billion euros. However, the “Spending Review” of the Court of Auditors revealed that the lack of clarity of the legislation gave rise to interpretations and abusive use of these devices, reports the Fiabilis Consulting Group (Business Management Advisor) in a press release. It also appeared that the experience of a tax audit might vary depending on the inspector responsible for the file.
Granting conditions and tougher financial penalties
Several exemptions have therefore been reformed in 2022. The grant conditions have been clarified and hardened. Of the sanctions which vary between 10 and 200% of undue exemption amounts, depending on the nature and seriousness of the offense, have been implemented. Finally, measures have been taken to standardize tax controls and harmonize practices inspectors, whose staff numbers are increased.
In the 1st semester, the FPS Finances sent a letter to the beneficiaries of the exemption to encourage them to be vigilant and self-evaluate by checking if:
– THE grant conditions the exemptions from payment of withholding tax from which they benefit are satisfied;
– THE vouchers are in order and up to date;
– the distribution of responsibilities of each party involved is clearly stated.
Yes in 2022, 60% of SMEs and large companies inspected have been rectifiedcompared to 53% a year earlier, it is mainly the amounts collected following the reform of financial sanctions which jumped 30%to 114.8 million euros (compared to 80.7 million euros).
“HR must ensure the consistency and accuracy of the information transmitted, so that the new eligibility conditions are fully respected, with supporting documentation.”
How to prepare for an inspection?
Tax audits will become stricter and more frequent. Companies that apply these wage subsidies must be particularly attentive to their internal processes and aware of the tax risks to which they are exposed,” warns the Fiabilis Consulting Group.
“The burden of proof, in the event of a tax audit, rests, in fact, on their shoulders, and not on those of their social secretariat. HR must ensure the consistency and accuracy of the information transmitted, so that the new eligibility conditions are fully respected, with supporting documentation”.
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