Relationship with Belgian authorities perceived as "good", but concerns about the level of tax uncertainty in Belgium remain

Deloitte survey highlights benefits and weaknesses of Belgian taxation
24 June 2010

Brussels, 24 June 2010 – Today Deloitte Belgium announced the results of its latest study: "Tax Certainty in Belgium – A Survey on the Relationship with the Tax Authorities". Overall, the relationship with tax authorities in Belgium is perceived as good. However, the level of tax uncertainty in the country remains a concern.

Deloitte conducted an on-line survey amongst tax directors of large enterprises and members of in-house tax departments in order to find out more about the perception of their relationship with the tax administration. The assessment was structured around four topics: the collaboration with tax authorities, reaching control agreements, tax certainty and rulings. André Claes, Partner of Deloitte Belgium’s tax practice explains: “The objective of this survey was to get a better understanding of how dealing with the tax authorities is perceived in Belgium, to get a better view on the different factors of tax certainty and to position Belgium in an international context.”

Key conclusions from the survey:

Of all respondents, 94% consider that their relations with the tax authorities are good to very good. However, 85% say that their level of satisfaction depends on the department involved and is often linked to the actual quality and professionalism of their personal contact at the administration.

The respondents generally have a favorable view of the tax authorities, in particular when it comes to the quality and professionalism of their contacts. At the same time, the respondents doubt the speed (50%) and consistency of responses given by tax authorities; 41% have faced conflicting opinions with regards to one and the same subject between tax units.

A procedure involving arbitration for a fast dispute-resolution procedure would be welcomed by 89% of the respondents, even if this might involve making concessions to the tax authorities.

The survey reveals that about 81% of the respondents are prepared to go to court when the administrative recourse fails.

When questioned directly about tax certainty in Belgium, almost half of the respondents (43%) stated that it was lower than in other industrial countries, compared with only 8% who believed that it was higher.

The main reason for this uncertainty was the instability of tax rules such as constant changes in legislation and retroactive changes. Furthermore, uncertainty also stems from inconsistencies and contradictions among tax officials. 45% even said they witnessed a change in the tax authorities' position in between two tax audits. "Such uncertainties are of course incompatible with a corporation's pressing need for predictability", indicates André Claes.

Almost all respondents believed that it would be an improvement if the tax inspector in charge would produce an audit report at the end of a tax audit, including all points of discussion, agreed or disagreed. Such practice already exists in the neighbouring countries and would give tax payers a fair and clear assessment of their tax status and would offer an inventory of the various discussion points.

More than two thirds of respondents had consulted the Ruling Commission (Services des Décisions Anticipées/Dienst Voorafgaandelijke Beslissingen) in the past five years and 35% had even done so several times. This clearly shows that the Ruling Commission is perceived to be an institution which responds to the company's needs, mainly in the area of corporation tax. For example, for VAT and personal tax matters, taxpayers mostly seek clearance with other tax authorities.

Almost 90% of respondents would consider consulting an ad hoc committee in the event of disagreement with a Ruling Commission position.