2023-12-20 07:08:00
Criticism is raining down on a minister who seems to have gradually isolated himself in his ivory tower, little sensitive to the opinions of accounting professionals. Pierre-François Coppens, a certified tax advisor who is part of the ITAA (Institute of Tax Advisers and Accountants), even mentions “numerous dysfunctions within the tax administration which, like a drunken boat, today seems somewhat the drift”. It draws a very harsh observation on the evolution of relations between citizens and the tax administration. Review of the main complaints addressed to Vincent Van Peteghem.
1. There is no longer an interlocutor
The first observation is the lack of communication. “In the name of reinforced and accelerated digitalization, we are witnessing a process of dehumanization which seems inevitable,” regrets Pierre-François Coppens. There is no one left to turn to. There are no more emails, everything goes through a platform (Myminfin, Editor’s note). And we don’t know who will be the manager of a file because the managers are replaced gradually in a kind of rotation, the reason for which we don’t really know. So there is no longer any interlocutor. If you have practical questions regarding tax loopholes, how to declare foreign income, etc., do not call the well-known central number. You are likely to be on hold for hours and then hear the communication suddenly cut off. Previously, we might contact experts by department – in corporate tax, in matters of preventive agreements, etc. – and these experts knew these matters in particular. This exchange of information was rich and vital both for the tax authorities and for professionals. Today, we feel a clear and clear desire from the hierarchy to no longer have the slightest contact with individual taxpayers or professionals, even if you encounter difficulties using the applications provided (Tax on web, Biztax, Intervat for VAT…). This orchestrated incommunicability is the total dehumanization of the tax administration service.” And this seems to come from a real strategic desire on the part of the tax administration hierarchy. “Because, obviously, who says meeting, says dialogue, says negotiations, and therefore letting go a little ballast. Here, we feel that the objective is ‘We don’t give up’. Even if it leads to legal disputes. However, if the administration reached an agreement with the taxpayer and avoided a lawsuit, it would certainly bring in more revenue.
Is another, simpler tax system possible?
2. Tax officials no longer know the law
Here, too, the burden is heavy: “Today, civil servants no longer master the material they are supposed to apply. Notices of rectification are no longer motivated or are poorly justified, the case law and legal provisions invoked are not understood or are interpreted in a fanciful manner, personal judgments have taken precedence over any legal argument, fines are imposed arbitrarily ”, estimates Pierre-François Coppens. The main reason, according to him, is the lack of training. “Before, when we joined the tax administration, we had quite long and in-depth training during which we learned everything: IPP, Isoc, VAT… But all that has disappeared and the civil servants themselves complain regarding it. Apart from a few exceptions – including the advance rulings service which still brings together people with more experience, and therefore more competent – this deterioration of knowledge is observed at all levels. It is a source of deep misunderstandings, wastes considerable time and the increasing complexity of tax legislation only accentuates this phenomenon”.
“What do tax inspectors do? They bother a company manager twenty times in a row regarding his car expenses, his benefits in kind, his restaurant bills. There are sometimes three or four inspectors to examine the admissibility of €10,000 of copyright, which ultimately costs more than it brings in.”
Even more serious: some tax agents no longer respect the law, according to Mr. Coppens. “Some people question tax rulings from one year to the next (a decision by the tax administration determining how the law will apply to a situation, editor’s note). The general principles of tax law (legal certainty, non-retroactivity of tax laws, etc.) have also been completely forgotten” (read opposite).
And to top it all off, the principle of the double degree of administrative jurisdiction is flouted, according to the tax advisor. “In principle, when you submit a complaint, it must be examined by a service other than the tax assessor, by lawyers who are supposed to start from scratch and start the procedure once more. But that is over: in almost 90% of cases, the complaints service no longer serves any purpose, except to be a chamber for ratifying taxes.” The only way out that exists for frustrated taxpayers is the legal route. “But, very often, the taxpayer gives up because he knows that it will take years and spend a lot of money before obtaining any legal decision. The risk is to now have two categories of taxpayers: those who have good legal insurance or considerable means, who will see their crusade to the end. And 90% of people who don’t have the means will accept this negative decision.”
3. The tax authorities are targeting business leaders, self-employed people and SMEs
For Pierre-François Coppens, the Minister of Finance has a double discourse: he claims that we are putting in place mechanisms (including minimum taxation, etc.) to better tax multinationals… but the administration’s priority targets clearly remain the same over time: self-employed people, business leaders and SMEs. “I know this all the better because I worked in the tax administration: companies that are large obviously put in place sophisticated mechanisms, for example for profit transfer prices between subsidiaries of the same band. They structure their operations quite intelligently, calling, in these cases, on specialist lawyers and large consultancy firms. Faced with them, the controllers are helpless because they do not have the technique or the training. It’s not that they don’t want to, but they do what they can: so this means that in fact, in 90% of cases, controllers prefer to examine relatively simple mechanisms. And what do they do? They bother a company manager twenty times in a row regarding his car expenses, his benefits in kind, his restaurant bills. There are sometimes three or four controllers to examine the admissibility of €10,000 in copyright, which ultimately costs more than it brings in. But the real fraud lies entirely elsewhere, it is the VAT carousels, it is the creation of false subsidiaries… But as they do not have training, the tax agents do not master international tax legislation, particularly on double taxation prevention conventions and on the notion of permanent establishment (a foreign company which has taxable activities in Belgium but which most often escapes the radar of the tax authorities, Editor’s note)”.
So tax agents don’t attack these structures? “No. Because they don’t know much regarding it and it is therefore easier for a controller to examine the professional expenses of a business manager or the accounts of an SME,” denounces Pierre- François Coppens. With negative consequences: “We discourage entrepreneurs, without garnering tax revenue that we might get elsewhere”.
Conclusion from our tax advisor. “I have worked in the profession for 30 years and have never experienced such a worrying situation.” Not sure that the man, in his wishes for 2024, will want the Minister of Finance to remain in his post…
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