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Enhancing Collaboration between Corporate Taxpayers and the Tax Authorities

by Werner Heyvaert, Vice-Chair of the Legal & Taxation Committee, AmCham Belgium

In its 2019 Priorities for a Prosperous Belgium (#PPB19), AmCham Belgium recommends enhancing the collaboration between corporate taxpayers and the tax authorities, with a view to promoting mutual respect. This priority is close to the hearts of our members and should not have a significant impact on the Federal Government’s budget, since it does not call for any tax reductions or cuts. On the contrary, there is efficiency to be gained for both the taxpayers and the tax authorities.

As the administrative burden or ‘red tape’ has been increasing at a staggering pace over the past couple of years – largely due to increased information and documentation requirements imposed on large (often multinational) enterprises – the cost for our member companies to comply with such obligations has become a real nuisance. Contemporaneous Transfer Pricing (TP) documentation and Country-by-Country (CbC) Reporting are two prominent, but definitely not the only, examples of such increased administrative burdens.

On the one hand, the tax authorities are making efforts to standardize and automate these reporting obligations, which is appreciated by AmCham Belgium and its members companies. On the other hand, the platforms that are put in place by the tax authorities are often not very user-friendly, and nearly all suggestions made by the business community to improve them are denied due to the lack of resources and/or choices made in the past. Moreover, many of our member companies find that Belgium is often asking more than what is required by international norms (so-called ‘gold-plating’). AmCham Belgium calls on the Belgian tax authorities to make a serious effort to make their reporting systems more user-friendly and do away with any gold-plating. The cost of compliance for the taxpayers is very high and increases with each additional element that must be reported as well as with the introduction of reporting systems which are not user-friendly and which differ from one country to another.

Tax authorities are also working on a “Co-operative Tax Compliance Program,” which they recently presented to AmCham Belgium’s Legal & Taxation Committee. While members of the Chamber are not per se opposed to such a program, it seems that the project is still largely a ‘work-in-progress,’ and the emphasis is to a large extent on the transparency of the participating taxpayers’ information and documentation for the benefit of the tax authorities. The impression was that entering the program will, again, be a lengthy and relatively burdensome process for the taxpayers. Conversely, it was much less apparent which benefits taxpayers could expect from participating in the program.

The international business community looks to develop long-lasting relationships with the tax administration based on mutual respect to reduce uncertainty and promote predictability. AmCham Belgium stands ready to be a partner to the authorities to establish a transparent collaboration model.

 

Download our 2019 Priorities for a Prosperous Belgium

 

About the author

                                                                                    

Werner Heyvaert, Vice-Chair of the Legal & Taxation Committee, AmCham Belgium
Werner has over 30 years of experience as an international tax lawyer in Brussels, Luxembourg and New York. Among many other assignments, he has acted as an expert for Belgium before the TAXE Committee of the European Parliament, in the slipstream of LuxLeaks.