Belgium introduced a reporting obligation for legal arrangements (such as trusts, foundations, partnerships, and certain low-taxed entities) set up by private persons effective for tax year 2014 (income year 2013). The existence of these legal arrangements must be declared in the annual personal income tax return by the founders of the arrangements, as well as by anyone who receives dividends or other benefits from the arrangement.
Until tax year 2023, only basic information regarding the founder or the beneficiaries of the legal arrangement had to be included in the income tax return. However, effective for tax year 2024 and going forward, more detailed information regarding the arrangement’s assets and income must be disclosed. Moreover, this information must be included in a separate form -- Annex 276 CJC -- for each legal arrangement. The forms must be attached to the income tax return.
Among the information to be included in Annex 276 CJC is the value of the legal arrangement (the sum of the assets held by it) at the end of the taxable period. Furthermore, the portion of the assets contributed by the founder also must be disclosed.
In addition, a detailed overview of all income received by the legal arrangement must be provided. In this respect a distinction must be made depending on how that income will be taxed in the hands of the ultimate beneficiary. This is a very complex exercise that will most likely require the assistance of a financial or tax expert.
The deadline for filing the personal income tax return (including Annex 276 CJC) for tax year 2024, income year 2023, is in principle set for June 30 for paper filings and July 15 if the tax return is filed electronically. Complex tax returns filed electronically have an extended deadline until October 16.
The Belgian tax authorities announced on their website that the extended deadline also applies to those declaring a legal arrangement and/or the benefits thereof in their personal income tax return for tax year 2024 and who submit their tax return electronically. The extension applies automatically if the income tax return linked to tax year 2023 already mentioned the existence of a legal arrangement and/or the benefits thereof. Individuals reporting the existence of a legal arrangement and/or the benefits thereof for the first time must apply for the extension by ticking the appropriate box in their online income tax return.
Taxpayers who receive a proposal for a “simplified” tax return must contact their local tax office to obtain the extended deadline by October 16. The Belgian tax authorities’ website does not make reference to taxpayers who might file their income tax returns on paper. In our opinion, the extended deadline should also apply to these taxpayers; however, we would recommend contacting the local tax office for confirmation.
For more information on Belgium’s new reporting obligation, please consult your regular BDO contact or the author of this article.
Charlotte Lemahieu
BDO in Belgium
Until tax year 2023, only basic information regarding the founder or the beneficiaries of the legal arrangement had to be included in the income tax return. However, effective for tax year 2024 and going forward, more detailed information regarding the arrangement’s assets and income must be disclosed. Moreover, this information must be included in a separate form -- Annex 276 CJC -- for each legal arrangement. The forms must be attached to the income tax return.
Among the information to be included in Annex 276 CJC is the value of the legal arrangement (the sum of the assets held by it) at the end of the taxable period. Furthermore, the portion of the assets contributed by the founder also must be disclosed.
In addition, a detailed overview of all income received by the legal arrangement must be provided. In this respect a distinction must be made depending on how that income will be taxed in the hands of the ultimate beneficiary. This is a very complex exercise that will most likely require the assistance of a financial or tax expert.
The deadline for filing the personal income tax return (including Annex 276 CJC) for tax year 2024, income year 2023, is in principle set for June 30 for paper filings and July 15 if the tax return is filed electronically. Complex tax returns filed electronically have an extended deadline until October 16.
The Belgian tax authorities announced on their website that the extended deadline also applies to those declaring a legal arrangement and/or the benefits thereof in their personal income tax return for tax year 2024 and who submit their tax return electronically. The extension applies automatically if the income tax return linked to tax year 2023 already mentioned the existence of a legal arrangement and/or the benefits thereof. Individuals reporting the existence of a legal arrangement and/or the benefits thereof for the first time must apply for the extension by ticking the appropriate box in their online income tax return.
Taxpayers who receive a proposal for a “simplified” tax return must contact their local tax office to obtain the extended deadline by October 16. The Belgian tax authorities’ website does not make reference to taxpayers who might file their income tax returns on paper. In our opinion, the extended deadline should also apply to these taxpayers; however, we would recommend contacting the local tax office for confirmation.
For more information on Belgium’s new reporting obligation, please consult your regular BDO contact or the author of this article.
Charlotte Lemahieu
BDO in Belgium