Summary
Every year, the Belgian Taxman reviews between 6,000 and 7,000 taxpayers to check whether they have failed to declare their foreign bank accounts and any earnings they generate. Until now, such cases often allowed the tax authorities to look back as far as seven years. The Constitutional Court has recently ruled that in many situations this retrospective approach is not permitted.
The powers currently available to Belgian Tax Authorities in income tax matters, allowing them to conduct further investigations when information is received from abroad, do not grant them free rein to examine whatever they wish. According to the Belgian Constitutional Court, this investigative authority must be interpreted narrowly: it does not permit the administration to launch new inquiries when it has already received the same information in the past and failed to act on it at the time (Constitutional Court, 17 July 2025, No. 107/2025).
Increased Focus on Foreign Accounts
In the 2024 tax return (covering income earned in calendar year 2023), 418,214 Belgian households declared having a foreign bank account, which is 10% more than the year before.
For the Belgian tax authorities, the balances of these foreign accounts are no mystery. Thanks to the OECD’s Common Reporting Standard (CRS) — involving over 100 participating countries — Belgium’s Federal Public Service (FPS) Finance receives detailed annual information on foreign assets and related income, including exact account balances.
This information allows the Belgian tax administration to identify residents who fail to declare interest, dividends, or other income from those accounts.
- For tax years 2022 and 2023, about 6,700 files were selected for in-depth investigation each year.
- The audited cases from tax year 2022 ultimately yielded €21.5 million in additional taxes.
- Results for 2023 are still pending and 2024 is still being filed, as we speak.
Time Limits and Investigative Powers
When reviewing CRS reports, the tax authorities are bound by strict deadlines:
- From the date on which foreign information is received, they normally have 24 months to investigate undeclared income, which can then result in an additional tax surcharge.
- If the information suggests that previous years also involved undeclared income, the administration may investigate up to five years back (in the absence of fraud) or seven years back (in case of suspected tax fraud).
Belgian tax law provides a special assessment period (Article 358 of the Belgian Income Tax Code – BITC92) that applies when information from abroad reveals undeclared income. The tax authorities then have 24 months from receipt of the information to issue an assessment.
Originally, this was limited to five preceding years, later extended to seven in cases of fraud. Importantly, until 2016 it was only an assessment period, not an investigative one. A reform that year explicitly gave the authorities the right to also conduct actual investigations during this 24-month window, for the same five or seven years linked to the foreign information received (Article 333/2 BITC92).
The reasoning behind this was that, with the growing volume of CRS data being automatically transmitted from abroad, the administration would be unable to use the information effectively unless it was also allowed to open additional inquiries. It was almost inevitable that this new investigative power would in practice give rise to disputes. It was entirely predictable that tax inspectors would seek to adopt a broad interpretation of the expanded audit powers granted to them since 2016.
Constitutional Court’s Clarification
In its recent judgment, the Constitutional Court brought some clarity:
- Authorities may only investigate the five or seven preceding years if the new CRS data itself contains ‘new’ elements.
- They cannot use the same information repeatedly to reopen old years.
Example: If the tax office received a CRS report for 2021 income but took no action within the next 24 months, it cannot use a 2024 CRS report to re-examine 2021—unless the new 2024 report reveals additional facts that change the context of the 2021 data.
No Automatic Right to Go Back in Time
The judgment reinforces the narrow reading of Article 358 BITC92, which governs the use of CRS data. There is no automatic right to go back five years—or seven in case of fraud—simply because CRS information has been received.
According to the Constitutional Court, the same legal provisions also mean that foreign information must actually reveal previously undeclared taxable income in Belgium. This implies that the special assessment and investigation period can only be applied if the tax administration was not already aware of those undeclared amounts. If the authorities already knew (or should have known) of the income—for example through earlier information received from abroad—then the new data does not “reveal” anything, and the special term cannot be applied (para. B.11., §4).
In short, the Court confirmed—leaving no room for doubt—the earlier position of the Antwerp Court of Appeal (Decision of 22 October 2024): the tax administration may only investigate and assess income that is specifically identified in the newly received foreign information.
Practical Implications for Taxpayers
CRS reports are not always accurate, and taxpayers are advised to check them carefully, as errors are not uncommon. Taxpayers can verify which CRS records on their accounts have been transmitted to the Belgian authorities via MyMinfin.be.
It’s also important to note:
- Having a foreign bank account does not automatically create a Belgian tax liability.
- But the existence of the account must be declared both in the annual tax return and with the Central Point of Contact (CAP) of the National Bank of Belgium.
- While, in theory, failing to declare a foreign bank account can trigger a fine, in practice the Belgian tax authorities are primarily concerned with the undeclared income generated on those foreign accounts.
- When such hidden earnings are uncovered, taxpayers often face a tax increase of up to 50% on top of the normal assessment.
Key Takeaway
The recent ruling significantly limits the retroactive reach of the Belgian tax authorities when investigating undeclared foreign income. By requiring new evidence for each extension of the investigation period, the Constitutional Court has strengthened taxpayer protections and ensured a stricter reading of the law.
For Belgian tax residents with foreign bank accounts, the message is clear: declare correctly, double-check CRS data for errors, and know your rights when dealing with the Belgian Tax Authorities.