On 30 November 2022, the law containing various tax and financial provisions was published in the Belgian Official Gazette. With this, the legislator significantly extended the tax authorities' investigation and assessment options by significantly extending the associated deadlines. These changes take effect from assessment year 2023 or, in other words, for income years starting from 1 January 2022.

In the field of VAT, the 3-year limitation period is extended to 4 years when a return is not filed or filed late. Thus, the importance of bringing in documents on time only increases as filing a tax return one day late automatically carries an extra year of audit deadline.

In respect of income tax ( corporate income tax/personal income tax), a timely filed return retains the standard 3-year period for examination and assessment, but if no return is filed or a late return is filed, this period is also extended to 4 years. A new deadline of 6 years is introduced for what is considered a "semi-complex return", even if filed on time. By this the legislator means a declaration that contains the following elements:

• returns of taxpayers required to file a local file and/or country report for transfer pricing purposes;
• returns containing exemptions, waivers or deductions in respect of withholding tax granted on the basis of a double taxation treaty, the Parent-Subsidiary Directive or the Interest-Royalty Directive;
• returns reporting payments to tax havens;
• returns claiming credit for the flat-rate portion of foreign withholding tax based on a double taxation treaty or European directive;
• returns of income captured through reportable cross-border structures under the DAC-6 and DAC-7 directive.

For "complex" declarations, there is now a time limit of up to 10 years without the need for a fraudulent element here. A return is considered complex when the following elements are present:

• in case of a hybrid mismatch within the meaning of Article 2, §1, 16° of the Income Tax Code;
• In the case of undistributed profits arising from an artificial arrangement (within the meaning of CFC legislation, Article 185/2 of the Income Tax Code);
• when filing a return reporting a legal arrangement abroad (Article 307, §1/1 of the Income Tax Code).

The latter is especially important in personal income tax where this notification is sometimes, often unconsciously, forgotten.

If the assessment only relates to some disallowed expenses, such as car expenses, restaurant expenses, social benefits, etc., these last 2 instalments do not apply.

Where fraud is involved, the time limits for both VAT and income tax are also increased, from 7 to 10 years. As a result, accounting documents will now also have to be kept for 10 years instead of the previous 7 years. As compensation, the period within which the taxpayer can file an objection to an assessment has been extended from 6 months to one year.

We can therefore conclude that late filing of a return has major consequences and that companies with even a minor international aspect will often face a 6-year examination and assessment period.