Common Reporting Standards (CRS) offer tax authorities insight into your foreign capital

Since the introduction of the Common Reporting Standards or CRS in 2017, foreign financial institutions exchange detailed financial account information for customers with a tax residence outside Belgium with the Belgian tax authorities on an annual basis. This has led to a marked increase in investigations into foreign capital by the tax authorities. That means it is important to make sure your Belgian tax return is both accurate and complete. After all, the Belgian tax authorities can easily check whether you have reported all your foreign income correctly.

Additional investigations

If the tax authorities suspect a mismatch between the CRS report and your tax return, they may opt for additional investigation. Such investigations generally cover the past three years. In the event of an inquiry abroad, extending this period to seven years is common.

Comparing the tax return to the CRS data can be complicated, however. In addition to data identifying the foreign account holder, the exchange also includes information regarding the amounts of gross interest and dividends received. For gross dividends, withholding tax is always deductible. If you have already paid Belgian withholding tax on movable property over the dividends, this income need not be included in your tax return.

If investigations do reveal a failure to include certain foreign income in your tax return, the Belgian tax authorities may choose to apply a tax increase of up to 200% over this income. Our experts are happy to help you declare your foreign income correctly.