Increase in penalties for companies that do not comply with their tax obligations in a timely manner

Companies that repeatedly breach obligations in relation to filing their corporate income tax return in Belgium expose themselves to a newly introduced increase of the minimum taxable base of between 25% and 200%. A Royal Decree, which entered into force on 5 September 2019, now provides how these increases will be implemented concretely. The tax authority will consider the breaches made in the last four tax years in order to determine which increase percentage is applicable:

• increase of 25% for the second breach;
• increase of 50% for the third breach;
• increase of 100% for the fourth breach, and;
• increase of 200% for the fifth (and any following) breach.

Considering the above, make sure your company files its 2019 corporate tax return on time (regarding the 2018 income) in order to prevent the adverse tax consequences describe above. Please note that the (non-resident) corporate income tax returns have to be filed (electronically) by 26 September 2019 at the latest (for companies having their financial year ending 31 December 2018), for both Belgian companies and foreign companies subject to the Belgian non-resident corporate income tax.

Please also note that companies failing to file their tax return in a timely manner may be assessed considering a lump sum corporate taxable base, with a minimum of EUR 34,000 (increased to EUR 40,000 as of 2020). This minimum taxable base is applicable both to Belgian companies and to foreign companies (which are subject to the Belgian non-resident corporate income tax).