Tax Audits and Dawn Raids: Forewarned is forearmed

You may have read the articles in De Tijd and L’Echo of recent days exposing the way in which the Tax Authorities sometimes exercise their investigation powers: “La Justice donne carte blanche aux agents du fisc”, “Fiscus krijgt vrij spel om woning te onderzoeken” etc.

The political climate relating to tax planning and the scrutiny with which the Tax Authorities investigate the fiscal situation of companies have substantially changed in the recent past. As a result, the Tax Authorities have now a higher performance IT infrastructure (software facilitating data mining) and more specialised personnel (e.g. the Transfer Pricing Cell) at their disposal.

There are an increasing number of dawn raids by Tax Authorities, even in circumstances where there are no indications of tax fraud. Dawn raids occur at the premises of companies and, in some instances, at private dwellings of their managers and directors.

The tribunals of first instance of Antwerp, Bruges and Brussels have confirmed that the Tax Authorities have the right of active house search. In the event of a tax search of a private dwelling for which a warrant has been issued by the police judge, it is not necessary that the taxpayer is present during such search. The Tax Authorities take the position that they may copy the entire server of the taxpayer, which may contain private data of its directors and/or personnel.

Hence, your organisation must be prepared and your directors and personnel must be informed about their rights and obligations in the framework of a tax audit or an unexpected dawn raid. Experience shows that well informed taxpayers will be in a substantially better position to defend their rights in the framework of any subsequent tax dispute.

We offer individual training sessions and sanity checks with respect to the correct and safe behaviour in the framework of tax audits and dawn raids by the Tax Authorities. We thereby take into account the specifics of your business and organisation and  provide you and your colleagues with the necessary, tailor-made guidance about the scope of the powers of the Tax Authorities and how you should prepare your company for such scrutiny. 

Please contact Henk Vanhulle (+32 2 501 91 58), Svjatoslav Gnedasj (+32 2 501 94 70) or your usual Linklaters contact in this respect.