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Wait a minute Mr Taxman: disputing your assessment
It may be the case that the taxman sent you an advance warning saying he had found undeclared income. You subsequently sent him a lengthy explanation showing that your figures were in fact correct. He may have simply replied that he was sticking to his guns. And before you know it, you will receive an official envelope with a tax bill.
You do not have to leave situations like this unchallenged. In order to set the record straight, you need to file a réclamation or bezwaar. This means that you file a request to have the assessment declared null and void. That has to be done in a letter, not by fax nor by email. The letter has to be sent to the address of the tax director found on the back of the first page of the tax bill. Make sure that you mention all the relevant references. If in doubt, attach a copy of the tax bill. This starts an internal review procedure with the tax authorities.
What is important is to explain in detail why you do not agree. Maybe you forgot to mention a certain figure in the tax return, or the taxman overlooked a figure himself. Or all your expenses really are business expenses. Or the taxman got it wrong, and a particular type of income is not taxable.
It is also advisable to ask for a meeting with the tax director. It may help you get your point across.
Finally, do not forget to sign the letter. If the tax bill is issued in the name of both spouses or partners, both must sign.
Most importantly, do not waste any time. The letter must arrive with the tax director within six months (plus three working days) from the date the assessment was sent out. That is the date stated on the assessment. Preferably send the letter by registered mail. If you have waited until the last day, you can always bring it to the tax office and ask for a stamp confirming the date of receipt on a copy of the letter. Do not forget that, for the taxman, close of play is 4pm. If you find the door closed, you can try and send it by fax; you never know, the taxman may accept it.
Six months seems like a long time, but it passes quickly. If you are too late, your request will be rejected, except in some cases. Sometimes the mistake is so obvious that it would be inequitable if the taxman did not amend the tax bill. The tax authorities are allowed to reopen the tax file up to three years later if there are typos, miscalculations or glaring mistakes. Another reason for the taxman to reopen the file is when you have paid tax twice; in particular if you paid tax in Belgium as well as in another country.
You can also ask the taxman to reconsider the assessment when there are new elements that you were unable to produce before. Not everything is qualifies as a new element; a change in the law does not necessarily mean a review of your assessment. Case law from the Constitutional Court or the European Court of Justice may constitute new information. But if you are told there will be new case law that could support your case, a safe bet is to file your complaint within six months.
The good news is that you do not need to pay the tax you challenge. Of course you need to pay the tax that is due. That is the tax on the income that you declared or the tax on the income you have admitted to. The tax director should let the tax collector know how much tax is due on that income. But sometimes the information does not pass and the tax collector keeps asking for the tax.
The tax director has six months to make a decision. After six months, but not a day earlier, you can take your case to court. That is not always advisable and most taxpayers wait to see if the director will agree. You never know.
If the result is that you owed the tax, you have to pay interest, at 7% per year. If you get tax back, sometimes years later, you will also get interest. At 7% per year, that is a good investment… and it is tax free.