Belgium: general anti-abuse rule redefined

The new general anti-abuse rule (GAAR) was redefined in 2012 in order to provide the tax authorities with a more effective tool to combat tax avoidance. For registration duties purposes and inheritance taxes, the redrafted version of the GAAR applies as of 1 June 2012. For income tax purposes, it applies as from tax year 2013 in general and, in some cases, to legal acts relating to tax year 2012.

Several taxpayers submitted requests to the Constitutional Court to have these provisions annulled based on their presumed incompatibility with some constitutional rules relating to the allocation of competencies between the federal level and the regions, the constitutional legality principle and the principle of non-discrimination.

The Constitutional Court now rejected the request and, as far as the allocation of competencies between the different state levels is concerned, stated that the GAAR does not deal with the determination of the tax base but rather constitutes a method of proof. Thus the federal legislator was indeed competent to modify the GAAR, not only for income tax purposes, but also for registration duties and inheritance taxes.

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