“The criminal complaint of the Belgian special tax inspection (BBI) will only weaken the confidence in fiscal regularisation”, says Stijn De Meulenaer.
The day following our publication of the newspaper’s article with respect to the new legislation on fiscal regularisation, of which the implementation has made a slow start (DS October 25), we learned that the regional director of the Belgian special tax inspection in Ghent, Karles Anthonissen, has filed a criminal complaint with all Belgian prosecution services. He wants a criminal investigation into all fiscal regularisation cases that have been submitted with the “Contactpunt regularisaties”. Irrespective of whether prosecution services are happy with this course of action, considering their excessive workload, the question arises as to the legality and the appropriateness of this criminal complaint.
Since 2004, our country has provided legal conditions that regulate the declaration and regularisation of evaded income tax, at a fixed rate determined by law. As tax evasion is not only a fiscal problem, but also a criminal offence, declarants who have successfully completed their fiscal regularisation receive a certificate which will indemnify them from any further tax and criminal claims.
But the periods of limitation for fiscal and criminal proceedings are not necessarily the same. Essentially, one could say that the possibililty for the tax authorities to recover taxes in case of fraud ends after seven years. Things are different in case of criminal proceedings: their periods of limitation – which are much shorter - do not start as long as the fraud (money laundering) continues.
This distinction was not taken into account until mid 2013. Only during the summer of 2013 the legal possibility was created to have ‘capital for which the limitation period has expired’ (i.e. no longer fiscally recoverable, but presenting a criminal risk) regulated at a special rate of 35%. Only from this moment on declarants were obliged to account for the origin of the capital and had to explain their situation by means of a so-called “fraud scheme”. Previously, this wasn’t the case.
It is well known that the legislator wants to encourage those who have only done a regularisation of the capital for which the limitation period has not yet expired under the old legislation, to go back to the drawing board: the law even explicitly foresees in the possibility to do a regularisation a second time. The question remains whether the recent actions of BBI will have the intended results.
First and foremost, the question arises as to the legality of the criminal complaint of BBI. In order to file a criminal complaint that is admissible, one has to establish legal interest. The tax authorities only have an interest in pursuing investigations into cases for which the limitation period has not yet expired. This being said, the complaint could finally miss its real target.
Even if the prosecutors’ offices do take the complaint into consideration, the question remains on how they will handle this enormous amount of work in an efficient way. Moreover, the criminal institutions will have to take into account the settled case law of the Belgian Court of Cassation, that states that one can only speak of money laundering for which the limitation period has not yet expired if the judge can exclude every legal origin with certainty. In other words: only for the cases in which the criminal court concludes that the capital cannot possibly have been obtained in a legal way, can there be given rise to prosecution with any chance of success. Either way, this will only be a minority of cases.
The only thing that the initiative of BBI will probably achieve, is that the fragile confidence in tax regularisation that has been established over the years, will vanish in a split second. Basically, this complaint is like carrying water to sea. It’s pointless.