In depth

The Belgian Income Tax Code and the Belgian VAT Code provide that every taxpayer is obliged to submit, at the request of the relevant tax authorities, all books and records necessary to verify the amount of the taxpayer's taxable income. Such obligation also applies when the books and records are held digitally.

Until recently, the relevant provisions provided that such obligation to submit these documents is to be fulfilled by the taxpayer without obligation to move the books/records from its premises. This meant that, unless the taxpayer agreed to bring or send the (electronically held) books and records to the relevant tax authorities, the latter had to go to the premises of the taxpayer to review the taxpayers’ books and records in the context of a tax audit. Formerly, the taxpayer could thus always choose to submit such information to the tax authorities in a digital way or by post instead, but could not be forced to submit digitally.

Given that the on-site tax audits were obviously impacted by the contact restrictions imposed in the light of the COVID-19 pandemic, a  bill was adopted that contains a provision allowing the VAT and direct tax authorities to require the remote submission of electronically held books and documents through a secure online platform. This obligation (which recently became effective) is not limited to books/accounts but includes any document that is relevant to determine the taxpayer's taxable income. To note that the preparatory works to the bill confirm that these changes do not affect the Belgian tax authorities' right to visit to the taxpayer's premises, either by way of an announced tax audit or by way of a dawn raid.

The submission of books and records trough such online platform is a first step in the digitalization of tax audit procedures in Belgium, which is obviously accelerated by the COVID-19 pandemic. This initiative runs parallel to another initiative, which implies that as of 2025 all communication with the Belgian tax authorities needs to be carried out in a digital way through the dedicated platform.

Although such digitalization is welcomed from an efficiency perspective, it should be noted that this will clearly lower the barrier for the tax authorities to perform audits (and risks to entail an increase in the number of tax audits performed in the future) and will more efficiently allow datamining by the tax authorities in relation to the information submitted. In addition, we see that already today some tax inspectors require information to be provided through the dedicated platform (instead of via e-mail or post), which does not always facilitate the audit process.