A turning point for Belgian taxpayers with foreign bank accounts: the Constitutional Court has just imposed legal safeguards on tax investigations, which were until now perceived as intrusive and systematic. A Ruling That Rebalances the Relationship Between Tax Authorities and Taxpayers

Belgium’s Constitutional Court has issued a significant ruling that more strictly regulates tax audits related to foreign bank accounts. Until now, many taxpayers faced extensive retroactive audits ranging from three to seven years often accompanied by penalties between 10% and 50% for failure to declare passive income, such as interest.

In addition, passive income from abroad, including interest and dividends, is generally taxed at 30%, with additional fines depending on the region. This means that for the same tax regularization, sanctions may differ between Flanders, Brussels, and Wallonia fuelling a sense of injustice and fiscal inequality.

“These practices should be harmonized at the national level to ensure tax equality,” says a tax lawyer interviewed on the matter.

A Clear Deadline: 24 Months to Act

From now on, the tax administration must comply with strict rules when acting on Common Reporting Standard (CRS) data transmitted by dozens of countries under automatic exchange of financial information agreements.

The tax authority now has 24 months from the receipt of an NCD (Common Reporting Standard notification) to investigate the income related to that specific year. If it wants to extend the investigation to the past five or seven years (for bad faith or fraud), it must demonstrate that the data received contains clear and sufficient indications of wrongdoing.

“The tax office can no longer conduct retroactive audits automatically. There must be concrete evidence based on the information obtained,” explains Charlotte Lardenoit, lawyer at Sansen International Tax Lawyers.

Check Your Data on MyMinfin

Each taxpayer can consult the financial data sent to the tax administration via the MyMinfin.be platform. It is advisable to double-check the accuracy of the information, as errors are frequently reported.

“The date the tax office receives the data is critical, as it starts the 24-month countdown,” says Filip Smet, lawyer at Deloitte Legal Lawyers.

In 2022, 6,742 files were reviewed under this framework, resulting in €21.5 million recovered in taxes and penalties, according to Belgium’s Federal Public Service Finance (SPF Finances).

Disclosure Obligation, But Not Always Taxation

Owning a foreign account does not automatically mean that tax is due. However, the account must be declared both in the annual tax return and to the Central Point of Contact (CPC) at the National Bank of Belgium.

In the 2024 tax return (based on 2023 income), 418,214 Belgian households declared a foreign bank account — a 10% increase from the previous year.

In Summary
• The Belgian tax authority can access foreign financial data via NCD reports.
• A Constitutional Court ruling now imposes strict conditions on the use of such data.
• Tax investigations must be launched within 24 months of receiving the information.
• Retrospective audits (5 to 7 years) require clear indicators of fraud or bad faith.
• Penalty rates vary by region national harmonization is needed.

A Boost for Taxpayer Rights

This ruling represents a slowdown in blind audits and a strengthening of taxpayer protections, while also highlighting regional inconsistencies in tax penalties that should be addressed in the name of fair taxation.

Main sources:

Sources

SPF Finances (Belgique) Rapport annuel 2022 – SPF Finances
Moniteur belge
Cabinets spécialisés en fiscalité
• Deloitte Legal Lawyers Minimum taxable base once again withstands Constitutional Court scrutiny | Tax Alerts | Deloitte Belgium
• PwC Belgique
• Sansen International Tax Lawyers

No 10% tax increase in case of a first mistake – Practical consequences | EY – Belgium