In 2007, Belgium introduced a tax mediation unit. It is only now that tax mediation is up and running.
When you do not agree with the taxman, your only recourse is to go to court but you cannot go directly to court. You must first file an administrative appeal (reclamation / bezwaar) with the regional director of taxes. And do not leave it too late, you must do that within six months from the day you receive your tax assessment. It is only if the director denies your appeal or if does not take a decision within another six months that you can take matters in hand and go to court.
This administrative appeals procedure is often no more than a mere formality. The department of the regional director is subject to the same instructions as the local tax inspector. Moreover, a few years ago, Finance Minister Reynders decided that it would be a good idea to have the taxman who charged the tax also handle the appeal. Not surprisingly, most cases still end up before the courts.
In an effort to limit the number of court cases, the Minister set up the tax mediation department. Finally, after three years, it is now up and running.
Mediation is possible for most taxes -- income tax, VAT, and registration and inheritance tax -- and even for problems regarding the actual collection of the tax. It is not limited to individuals; companies and other legal entities may ask for mediation as well.
For income tax, mediation is only possible while the administrative appeal is pending with the regional director. Starting court a procedure definitively closes the door to tax mediation.
The procedure for mediation is quite informal; the taxpayer can apply by mail, fax, or even e-mail. The mediator acknowledges receipt within 5 days and he must decide within 15 days whether an intervention is warranted. The mediator can, indeed, refuse to look into the case if the application is manifestly unjustified or if the taxpayer has made no attempt to try to reconcile his position with that of the tax authorities
If he agrees to look at the assessment, the mediator can collect all the information that he considers useful and hear any individuals concerned. He must cast an objective eye on the file and try and reconcile the parties.
Mediation does not suspend the procedure with the regional director, or the recovery of the tax, but in practice, it is likely that the director will wait and see what the mediator proposes.
The mediator summarizes both positions in a mediation report. That report is not binding; the director can simply ignore it. And the taxpayer must not accept it either, but the mediation report and the decision are not open to any administrative or judicial appeal. However, if the case ends up in court, the mediation report will be submitted to the court, and that may be a good thing.
More information, FAQs and contact details can be found at www.conciliationfiscale.be.
Can tax mediation work in Belgium?
The department has five mediators who are assisted by twenty officials. They are all public servants from the Finance Ministry. And, of course, that raises questions as to whether they can really be objective. Nevertheless, we should give them the benefit of the doubt. Just look at the Ruling Committee; it is staffed with civil servants, but it has proven hugely popular and efficient, compared to the tax administration that is slow, stuck in bad habits and long procedures.
Of course, the mediators must stay within the confines of the law. They cannot ignore the law or propose a solution that would be against the law. Nevertheless, in a situation where both the taxpayer and the taxman stick to their guns and are convinced the other is in the wrong, they can help them see each other’s position and suggest an alternative in which they can find themselves.
Mediation offers a chance of a fast solution to avoid long and costly litigation with an uncertain result. A bad agreement is sometimes better than a favorable judgment. Mediation can also give a comprehensive solution for different administrative appeals.
From a theoretical point of view, the procedure can be criticized, but it certainly is a modern, proactive and pragmatic model that can prevent unnecessary litigation.
The Belgian government on November 15 adopted four royal decrees that implement some of the budgetary measures announced in Parliament by Prime Minister Herman Van Rompuy a month ago. Most of the measures must be implemented by law, but for some, the royal decrees are sufficient. (read the full article)
Belgium has adapted its legislation so that it can switch to the automatic exchange of information system under the EU savings directive as of 2010.
Under the EU savings directive,1 which entered into force on July 1, 2005, most EU member states are required to exchange information on the interest income earned by residents of other member states. However, Austria, Belgium, and Luxembourg negotiated a special option allowing them to withhold tax during a transitional period on the interest income earned by the residents of the other member states. This withholding tax is currently 20 percent and will go up to 35 percent in 2011. When the Austrian, Belgian, and Luxembourg tax administrations collect the tax, they must remit 75 percent of the amount to the home states of the individual saver. (read the full article)
The Belgian government recently submitted to the Chamber of Deputies bill nr 52/2170 that proposes a long list of tax measures, most of which involve improvements to the text of the law or the confirmation of a position taken by the tax authorities. In some cases, the bill proposes amendments to tax legislation
to bring it into compliance with the decisions of the Constitutional Court and the European Court of Justice. The most important tax measures, most of which would apply beginning in 2010, are described in this article.
Belgian Prime Minister Herman Van Rompuy delivered his State of the Union address in the Chamber of Deputies (the lower house of Parliament) on October 13, presenting the policy statement and draft budget for 2010-2011, both of which have been officially endorsed by the Cabinet.
Although the budget is in a deficit, the government has decided not to fill the gap of €20 million in one year. The budget instead calls for savings of 0.5 percent in 2010 and 1 percent in 2011. However, Van Rompuy was confident that Belgium will get its budget back in balance by 2015.
The prime minister pointed out that the 2010-2011 budget does not introduce any new taxes on employees but instead emphasizes new tax measures designed to change the behavior of Belgians regarding the environment, and to ensure more equitable taxation. (read the full article)