06 Mar Voluntary tax disclosure in Flanders starts today
A temporary measure in Flanders
Since 1 August 2016, it is possible to file a voluntary disclosure return on federal taxes (e.g. corporate income tax, personal income tax and registration duties levied on a federal level).
As of today, 6 March 2017, a voluntary disclosure is also possible in Flanders, for infractions concerning estate taxes and registration taxes, up to 31 December 2020. The decree introducing this regional tax regularization was published in the Belgian Official Journal on 23 February 2017.
Contrary to the federal measure, the Flemish voluntary disclosure is open to taxpayers for a limited time only. Oddly enough, only infractions committed prior to 1 August 2016 can be rectified, a limitation does not exist on the federal level.
The classification and methodology of the Flemish voluntary disclosure are close to identical to those on the federal level. Similarly, the regularization is a one-time possibility only, the procedure runs parallel to the federal one, and similar evidence rules and exclusions apply.
Which rates will Flanders impose on the amounts declared?
After payment of the regularization levy, the petitioner will receive both fiscal and penal immunity. Depending on the type of tax and depending on whether or not the statute of limitation has already been reached, the following fixed rates will be applied to the amounts declared.
| Type of tax | No statute of limitation from a tax perspective | Statute of limitation from a tax perspective has been reached |
|
Estate tax, direct lineage and between partners
|
35% |
2017 37%
2018 38% 2019 39% 2020 40% |
|
Estate tax, all other situations
|
70% | 2017 37% 2018 38% 2019 39% 2020 40% |
|
Registration tax
|
20% | 2017 37% 2018 38% 2019 39% 2020 40% |
Hence, the 37%-rate only applies to returns filed with the Flemish tax authorities in 2017. As of 2018, an additional 1% per annum is to be added to the regularization levy, until the maximum rate of 40% is reached in 2020. Again, this is identical to the federal voluntary disclosure measure.
The return and the list with ‘frequently asked questions’ is available on the website of the Flemish tax authorities.
Solution in the making for ‘mixed’ taxes
For the amounts for which the petitioner cannot demonstrate which part of the amount declared is subject to federal taxes and which part is subject to Flemish taxes, a cooperation agreement between the federal government and the Flemish region will be concluded. The draft agreement was submitted for advice to the Council of State. We will follow up on this.
Mythra has a broad experience and the necessary expertise with respect to preparing and voluntary disclosures, both on the federal and the Flemish level.
Should you wish further information, do not hesitate to contact us.