Tax audits, VAT & disputes
How does a tax or VAT audit work in Belgium and how can you prepare for it?
An administrative audit follows a legally defined procedure. Whether it's a documentary review (remote) or an on-site audit (at your company's premises or at the firm's offices), the steps remain predictable:
The notification or request for information: The tax authorities send you a notice of audit or a request for information specifying the period and the taxes concerned (VAT, Corporate Tax, Personal Tax or Legal Entity Tax).
Preparing the file: In consultation with Ascend Accountant, we gather all the necessary registers, invoices and supporting documents to ensure the consistency and accuracy of your accounting.
The audit process: The inspector verifies the consistency of the declarations, the validity and deductibility of expenses, and the compliance of the financial flows. Ascend Accountant assists or represents you in answering the auditor's technical questions.
The closure: The examination concludes either with a closure without adjustment, or with the sending of a proposal for rectification (or a notice of rectification in VAT) if the Administration considers that an adjustment is justified.
What documents is the tax inspector entitled to request and for how many years?
The Administration has the right to investigate and consult all books, registers, invoices, bank statements and contracts related to your professional activity.
Mandatory retention period: The general retention period for all books, registers, invoices and supporting accounting and tax documents is 7 years (subject to specific rules or depreciation, particularly in matters of real estate revisions).
Investigation, assessment and collection deadlines:
Income tax: The standard audit period is 3 years . This period is extended to 4 years in the case of a complex return or one filed late or not filed at all. In cases of fraudulent intent or intent to harm, the investigation period is 7 years (subject to prior notification of indications of fraud).
VAT: The time limits for claiming and recovering the tax are 3 years (general time limit), extended to 4 years in the event of absence or delay of declaration, and to 7 years in the presence of fraudulent intent or during specific procedures for the exchange of international information.
What to do in case of disagreement or a proposed correction from the administration?
Receiving a proposed adjustment does not mean automatically accepting its conclusions. The taxpayer's rights are protected at every stage of the procedure.
Response to the proposed adjustment: You have a legal period of one month (from the date the proposal was sent) to indicate your agreement or submit a reasoned response expressing your disagreement. Ascend Accountant drafts this response based on legal texts, official doctrine, and case law.
Notification of decision or enrollment: If disagreement persists after the exchange of arguments, the Administration continues the procedure and establishes the tax assessment.
The preliminary administrative claim: Upon receipt of the tax assessment notice, you generally have a period of one year to file a reasoned administrative appeal (claim) with the competent services of the FPS Finance.
Legal recourse: If the administrative phase does not lead to a satisfactory solution, the dispute can be brought before the Court of First Instance (which constitutes the first level of jurisdiction in tax matters).
What are the most frequently penalized errors during an accounting audit?
Certain anomalies recur regularly during audits and lead to adjustments accompanied by tax increases or late payment interest:
Insufficient justification of professional expenses: The deduction of expenses without valid supporting documentation or without a demonstrable link to the acquisition or preservation of income.
The confusion between private and professional expenses: The charging of personal purchases or expenses to the company without justification or appropriate processing.
Errors in adjusting financial years (cut-off): Failure to allocate products and expenses to the correct financial year (failure to adjust invoices to be received or issued).
Errors in the application of VAT schemes: Incorrect application of reduced rates, absence of mandatory information in reverse charge or errors in VAT deduction.
The under-sizing of benefits in kind (BIK): The absence or poor assessment of benefits granted to managers or employees (company vehicles, housing, heating, electricity).