what do you need to know, as a taxpayer with assets abroad?

Tax & Legal
23 August 2022

by Ine Coolman and Hannelore Durieu

What do you need to know, as a taxpayer with assets abroad?

The majority of personal income tax returns have been submitted, giving the tax authorities fresh fodder for audits. As announced earlier this year, Belgians with assets abroad are now more likely to be subjected to a tax audit. In this article, we’ll cover a few things you should be aware of when filing and registering your foreign assets. Belgians with assets abroad are not the only ones at a greater risk of tax audits this year: the same applies to Belgians with multiple properties, those who hold copyrights, and executives who are building a pension via their company.

What do you need to know, as a taxpayer with assets abroad?

More about assets abroad

Thanks to automatic exchange of information between the various member states, the Belgian tax authorities are fully aware of all your assets abroad. This applies to both your accounts and real estate held in foreign countries.

Do you have an account abroad? You must report this to the Nationale Bank and list it when you file your personal income tax return. NB: even if you have “cryptowallets” held at an “exchange” with a foreign licence, you need to report these to the National Bank.

You also need to report your real estate abroad in your tax return. Up to and including 2021, you were required to state the rental income. Starting in 2022, you need to specify the cadastral income (property income). To calculate this income for existing real estate, the tax authorities issued a questionnaire. This questionnaire had to be filled in and returned by 31 December 2021.

Here are a few things to be aware of when filling in the questionnaire:

  • Always specify the total value of your real estate, whether or not you are a joint owner of the property
  • Anyone with rights in rem to real estate abroad must submit a questionnaire – even if you only benefit from usufruct or are a joint owner of the property. If you only hold the bare ownership, you do not need to submit a questionnaire
  • Ensure that questionnaires relating to the same real estate correspond
  • If you buy real estate abroad, you must submit this questionnaire within four months of making the purchase
  • If you fail to list this real estate, or any foreign accounts, or haven't completed all the necessary formalities, you risk being charged a proportional or administrative fine if you are audited by the tax authorities.

Tax audits also focusing on…

The tax authorities are planning additional audits this year for owners with significant legacies. Income resulting from real estate is considered to be property income. If you rent out several properties, this income may be considered professional income. The onus is on the tax authorities to demonstrate the professional nature. However, if you are renting out one or more properties as a private individual, this is generally not considered a professional activity; it is normal management of your private assets.

Copyright royalties are also being targeted for audits. The beneficial tax regime for these royalties is currently heavily invoked. The tax authorities want to identify potential fraud via these additional audits.

Finally, executives and self-employed individuals who are building up a supplementary pension through their companies are also being brought under the magnifying glass. As an executive, the combined total of your statutory and supplementary pensions may not exceed 80% of your most recent gross annual salary. The tax authorities will be carrying out extra audits on this 80% threshold.

Do you need support for a tax audit or with filing your personal tax return? Just get in touch with us.