ULD Quater – Introduction
The end is nigh for Belgium’s so-called Unique Liberation Declaration quater (ULD quater) procedure.
This has allowed Belgian residents to regularise their tax position.
It will come to an end with effect from 31 December 2023.
ULD Quater – Present Status
ULD Quater has been a lifeline for taxpayers looking to voluntarily regularise their previously undeclared assets.
In exchange for a flat-rate tax of 40% on assets with uncertain origins, taxpayers could find relief from criminal prosecution, particularly for money laundering offenses.
The certificate of regularisation issued upon completion of the process has been invaluable, especially for Belgian banks, allowing them to accept assets with less than perfectly traceable origins.
This has been a boon, even for taxpayers beyond reproach but unable to provide written proof of their asset’s origin, often due to the antiquity of the assets in question.
ULD Quater: The Final Chapter
A crucial update came in July 2023 when the tax authorities clarified that provisional “pro forma” and “materially incomplete” declarations for 2023 wouldn’t be accepted with the intent of completing them in 2024.
However, reasonably complete declarations submitted in 2023 and later updated with minor additions in 2024 should still be considered admissible.
But, the FAQs remain ominously silent about what happens after December 31, 2023.
Beyond December 31, 2023: What’s on the Horizon?
The looming deadline raises questions about the future of taxpayers who fail to regularise their assets by the cutoff date.
The Belgian Minister of Finance hinted at a new procedure, suggesting that from 2024, taxpayers seeking to regularise tax-barred assets would have to declare this to the Prosecutor’s office, which would initiate an extended transaction procedure.
However, significant uncertainties persist.
Will the tax authorities cease processing regularizations in 2024 and redirect taxpayers to the Prosecutor’s office?
The Prosecutor’s discretionary power over whether to prosecute or propose a transaction adds an extra layer of complexity.
Moreover, discussions are underway to introduce a new “permanent administrative approach” to tax regularisation, which could tax up to 45% of spontaneously regularized tax-barred assets, seemingly in exchange for immunity from criminal prosecution.
The clarity and security of this solution remain questionable.
For those with time-barred capital, there’s the option to revive the spontaneous declaration of income to the Inspection Spéciale des Impôts / Bijzondere Belastinginspectie service, although this raises concerns about criminal immunity and the ability to regularize time-barred capital.
Conclusion
There is impending uncertainty beyond 2023, and with the government’s “new approach” appearing to be less favorable than ULD quater.
As such, time is of the essence for those wishing to regularize their assets, especially in the case of repatriation.
The clock is ticking, and the future of tax regularisation in Belgium is shrouded in uncertainty.
If you have any queries about ULD Quater, Belgium tax or tax matters in general then please get in touch.