Secret commissions: how long for identification?
July 2021 – If a company does not identify the recipient of an expense it has made, it will incur a secret commission assessment. It can avoid this assessment by identifying the beneficiary "no later than two years and six months after the first of January of the relevant tax year". The Antwerp Court of Appeal provides further details on this matter.
Special contribution
If a company incurs business expenses or grants certain benefits without identifying the recipient of these sums, it incurs a special assessment of 100% of the expenses. In principle, it is not necessary to identify the beneficiaries if an invoice has been issued. But if no invoice has been issued and you make a specific expenditure (e.g. you pay a notary) or grant a benefit to a specific person (e.g. you pay private expenses of family members via your company), you must identify this person by means of a 281.50 form.
If you do not do this, you risk, as we have indicated, having to pay a special contribution of 100% of the amount of the expenses or benefits. This special assessment is not deductible in itself.
Avoiding the assessment
If you have not drawn up form 281.50 and are therefore liable to pay the special contribution on secret commissions, you can still avoid it if you can prove that the beneficiary has declared the income in question.
The levy is also not applicable if the beneficiary "has been unambiguously identified at the latest within two years and six months from 1 January of the tax year concerned". The reason for this loophole is that the tax authorities still have time to effectively tax the beneficiary on the benefit received.
Let's illustrate this with an example: a company has an accounting year that coincides with the calendar year.
In 2021 (tax year 2022) it has granted a benefit. The recipient of this benefit must be identified by 30 June 2024 at the latest (i.e. two and a half years after 1 January 2022).
Tax year
The question was raised before the Antwerp Court of Appeal as to how this deadline should be calculated when the company's accounting year does not coincide with the calendar year.
Let us assume in our example that the benefits were granted in 2021, but that the accounting year ends on 30 December 2021.
The individual receives this benefit in the 2022 tax year (for personal income tax), but the company granted it in the 2021 tax year (for corporate income tax).
Which tax year does the taxman use?
If the tax authorities start with the tax year 2021, the identification must have taken place by 30 June 2023 at the latest. Otherwise, it is 2024.
In practice, the tax authorities do not hesitate to use the first deadline.
Relying on the beneficiary
This question was therefore submitted to the Antwerp Court of Appeal
In this case, the special contribution related to the 2014 tax year, but the beneficiary only received the benefit in the 2015 tax year.
The beneficiary was "unambiguously identified only in December 2016". Too late or in time?
Too late for the taxman who calculated the two and a half years from 1 January 2014 (30 June 2016). In time according to the taxpayer who calculated them from 1 January 2015.
The Antwerp Court of Appeal is categorical: the starting point is the 2015 tax year, so the taxpayer was identified in time. This is not completely illogical: the purpose of the two and a half years is that the tax authorities still have the opportunity to tax the income in the hands of the recipient. So almost everyone relies on the beneficiary's tax year. Now the tax authorities are also doing so.
