Tax havens
April 2022 – When a company makes payments to persons or permanent establishments established in a tax haven, it must declare them. The administration has recently clarified what this means exactly... at least according to the tax authorities.
Reporting obligation
If your company makes "direct or indirect" payments to persons or permanent establishments that are established in a tax haven, or if it makes payments to bank accounts that are managed or held by one of these persons or permanent establishments, or to bank accounts that are managed or held with credit institutions established or with a permanent establishment in a tax haven, you must inform the tax authorities via your corporate tax return.
The reporting obligation only applies if the total payments made during the taxable period reach a minimum amount of 100 000 euros. The reporting obligation always applies to "real and genuine transactions".
The term "payments" must be considered in a very broad sense. This obviously includes cash transfers, but also payments in kind or in cryptocurrencies.
You should also pay attention to the recipient of the payments. If, for example, you make a payment to a permanent establishment in Egypt (which is not a tax haven) of a company in Panama (which is a tax haven), the taxman looks beyond that permanent establishment and you still have to declare that payment. Conversely, if you make a payment to a Panamanian permanent establishment of an Egyptian company, the taxman does not look beyond the permanent establishment and you still have to report the payment.
The concept of a tax haven
On the website of the FPS Finance you will find a list of countries that the tax authorities consider to be tax havens for the purposes of this reporting obligation: https://financien.belgium.be/sites/default/files/bbisi/liste_des_etats.xlsx
There are in fact three types of tax havens:
states with no or low taxation, which appear on a list of the Belgian tax authorities;
uncooperative jurisdictions, which are on the European blacklist; and
states considered by the OECD as 'non-compliant' or 'partially compliant' (in terms of tax transparency).
Initially, the Belgian tax authorities did not consider countries assessed as partially compliant by the OECD as tax havens. But the situation changed in 2020, so that the reporting obligation also became applicable for these countries. At the time, this was specifically Turkey and Malta. In principle, the reporting obligation was to come into force for the 2020 payments, but due to an error, the entry into force was postponed... until today. The new circular explicitly states that the reporting obligation applies to partially compliant statements in respect of payments made as from the 2022 tax year. For companies that keep their accounts on a calendar year basis, this means payments made from 1 January 2021.
How to report these payments?
The declaration of the payments in question must be made on form 275F. This form is part of the company return (both for residents and non-residents). No other form is accepted.
It is not sufficient to attach a PDF with a list of payments to the declaration and to cross-reference this attachment in form 275F. The beneficiary must also be identified very precisely: if even the house number is missing or the address is incorrect, the declaration will be considered incomplete. And although the Antwerp Court of Appeal disagrees, the tax authorities consider that a late declaration is equivalent to a non-declaration.
If several payments have been made to the same beneficiary, the tax authorities require that these payments be listed separately in the declaration. However, the Ruling Commission has ruled that this is not necessary if the payments are periodic and of the same nature to the same beneficiary. A grouped declaration would therefore be possible. But in this recent circular, the tax authorities see things differently.
Sanction
If certain payments have not been declared, they cannot be deducted as professional expenses. They are then added to the disallowed expenses. But beware: just because the payments have been declared does not mean that the expenses are automatically deductible. They are only deductible if they are professional expenses that are intended to acquire or maintain professional income. And even if the expense is "genuine and real", it can only be deducted if it has been declared.
Finally, there are also other administrative obligations that should be kept in mind. If you pay commissions or fees or give benefits of any kind, you must draw up a statement. If you do not, you will have to pay the so-called secret commission fee.
