One-year deadline for tax protests : also for tax assessments sent out in 2022!
One-year deadline to file a tax protest
As per the law of 20 November 2022 (B.S., 30 November 2022 – the “Law”), the deadline to file a tax protest (“reclamation”/”bezwaar”) for income tax purposes has been extended from six months to one year. Said deadline is in compensation for the extension of the statutes of limitations in favour of the Tax Administration that has been introduced by the Law (e.g. new statutes of limitations for tax audits from three years up to ten years). The deadline starts to run as from the third working day following the date on which the tax assessment was sent out to the taxpayer.
Entry into force
As to the entry into force of this one-year deadline to file a tax protest, the Law provides that it is applicable as from 1 January 2023 (Article 102 of the Law). The Parliamentary Works did not provide additional guidance in that respect.
Based on the text of the Law, an uncertainty remained as to the entry into force of this one-year deadline: would it be applicable to (i) taxes enrolled as from 1 January 2023, (ii) tax assessments sent as from 1 January 2023 or (iii) all tax assessments for which the (old) six-month deadline has not expired on 1 January 2023?
The Tax Administration has recently confirmed that the third option would be applicable. A circular should be published shortly. This means that taxpayers have six extra months to file a tax protest in relation to any tax assessment sent after 29 June 2022.
As an example, companies which might have thought that they were too late to challenge a tax assessment sent on, e.g., 5 July 2022, now receive confirmation that the deadline has not expired and that they have until 7 July 2023 to file their tax protest.
The clarification by the Tax Administration is welcome.
It is remarkable to note that the extended statutes of limitations in favour of the Tax Administration (e.g. new statutes of limitations for tax audits from three years up to ten years) introduced by the Law will not be subject to the same rule: they only enter into force as from 1 January 2023 (assessment year 2023) – regardless of whether or not the statutes of limitations applicable before the Law are time-barred at that date.
Finally, please note that if a contested tax assessment has been paid, one should not wait to file a tax protest, as the moratorium interest will only start to run as from the first day of the month following the filing of the protest.