Taxpayers must, besides mentioning the existence of a foreign account in their individual income tax return, also report certain data about that account to the Central Point of Contact (CPC) with the National Bank of Belgium (NBB). A Royal Decree from 3 April 2015 sets this new regime into motion. The new rules apply as from 23 April 2015.
Central Point of Contact
Reporting obligation for financial institutions established in Belgium since 2010
Since 1 July 2011, banking secrecy rules have been eased. Tax authorities can ask a banking, exchange, credit, or savings institution established in Belgium, for information about the accounts of a taxpayer when there are indications of tax fraud or when they plan an assessment based on indications of higher than reported wealth.
The CPC was established with the NBB to enable the tax authorities to easily verify with which financial institution a taxpayer has one or more accounts. Every banking, exchange, credit, or savings institution established in Belgium must introduce the identity of its clients, together with the numbers of their accounts and contracts. Those institutions must report that information every year, no later than 31 March, to the CPC for the preceding calendar year. As an exception, the financial institutions also had a reporting obligation for the years 2010-2012 and this had to be completed by 1 February 2014.
New reporting obligations for taxpayers with foreign account(s)
The reporting to the CPC is an obligation for each person who must mention the existence of a foreign account in his individual income tax return.
A taxpayer must mention the existence of accounts in his tax return of which he, his spouse and the children whose income is added to the parents’ income were the holder at any moment during the taxable period with a banking, exchange, credit or savings institution established abroad, and also the country or countries where those accounts were opened.No later than the moment of the filing of the tax return in which the existence of the foreign accounts is mentioned, must the numbers of those accounts, the name of the institution and the country or countries where those accounts were opened, be reported to the CPC, unless the mention was already made in a previous assessment year.
The tax return contains the necessary sections to mention the existence of the foreign accounts and to confirm that the numbers of those accounts were reported to the CPC.
The Royal Decree of 3 April 2015 clarifies what must be understood exactly by “foreign account”. Only the foreign accounts opened by the taxpayer with a banking, exchange, credit, or savings institution established abroad, must be reported to the CPC. Any securities account which has been opened abroad, must also be reported to the CPC.
The foreign account co-held by several taxpayers, must be reported to the CPC by each taxpayer. The same applies for accounts which have been opened abroad by an association without legal personality where the taxpayer is part of and in case of a divorce.
Reporting of data to the CPC
The taxpayer must report the following data to the CPC:
Electronic reporting or reporting on paper
The taxpayer reports the above-mentioned data about the foreign accounts either electronically or on paper to the CPC.The electronic reporting of the data is done via the website of the NBB. The identification of the taxpayer and the authentication of the data is done by means of the certificate on the electronic ID. The NBB determines the technical modalities, the bearer, and the transmission channel, as well as the structure and the format of the reportable data.
If the taxpayer reports the data on paper, he must use the standard form that the tax authorities have established in consultation with the NBB. The form is available on the website of the NBB or upon written request addressed to the NBB. The taxpayer must complete the form, sign, and return it to the following address: National Bank of Belgium, Central Point of Contact, Berlaimontlaan 14, 1000 Brussels, along with a legible photocopy of both sides of the Belgian identity card or residence permit.
Both done electronically and on paper, the taxpayer may rely on his proxyholder if the latter submits his power of attorney and a photocopy of both sides of the Belgian identity card of the taxpayer and the proxyholder to the CPC.
When is there a reporting obligation?
The reporting by the taxpayer (or his proxyholder) must occur at the latest simultaneously with the filing of the individual tax return, in which the existence of the foreign bank account is mentioned. If the reporting has already happened in a previous assessment year, then a new reporting is not required (assuming no changes to the data must be reported). Since the modalities of the reporting obligation take effect as from income year 2014 (assessment year 2015), any taxpayer with foreign accounts will have to report to the CPC before filing the individual tax return.
Also, any taxpayer who has mentioned the existence of a foreign account for the assessment years 2012 to 2014, should, per assessment year, report each foreign account. The taxpayer will be invited by the tax authorities in writing. He then has two months to do the registration. The invitations would soon be in the mail.
Currently, the NBB is working on the access to its website for the electronic reporting and on the standard form for the report on paper. It is anticipated that the site would be ready by the end of May.
Supervision by the NBB is limited. The NBB only verifies the accuracy and completeness of the data reported to the CPC. The NBB cannot improve on its own initiative the data, which the taxpayer has validly reported to the CPC previously, only the taxpayer can. Data that cannot be produced or transmitted in accordance with the statutory rules, are deemed not to be reported to the CPC. The NBB notifies the sender which rule(s) was (were) not observed. Taxpayers have 30 days to still meet their reporting obligation. The NBB records the date of receipt of the valid data reported and notifies its receipt.
Retention period of the data
The retention period of the data reported to the CPC ends for the data pertaining to a foreign account and the taxpayer at the end of the 8th year following the taxable period during which the taxpayer has reported the closing of the (last) foreign account to the CPC.
Protection of privacy
The NBB informs the taxpayer through its website and on the standard form about:
For the foreign accounts of which the taxpayer has been the holder for the assessment years 2012-2014, this information is repeated in the invitation to report the required data to the CPC which the tax authorities address to taxpayers.