In July 2013 a legal obligation was introduced for founders and beneficiaries to report foreign legal structures in their respective annual income tax returns as from assessment year 2014 (income of the year 2013). This was flagged up in our newsletter of 22 July 2013.
The foreign legal structures targeted by the reporting obligation include not only trusts but also foundations and companies, in so far as the latter are included in the “blacklist” set out in a Royal Decree.
The Royal Decree containing the blacklist was published in the Belgian Official Gazette on 2 April 2014.
Below, you will find an update on the reporting obligation, as it applies to the filing of income tax returns for assessment year 2014 (income 2013).
1 Who needs to report ?
First, the obligation applies to founders. The definition of ‘founders’ should be understood as:
- Natural persons who have set up the foreign structure; or
- Natural persons who have contributed property and rights, if the structure was set up by a third party; or
- Natural persons who are direct or indirect heirs of the persons referred to above, unless such heirs can prove that they or their heirs will never enjoy any financial or other advantage deriving from the structure.
Secondly, the reporting obligation applies to beneficiaries. The definition of ‘beneficiaries’ should be understood as:
- Natural persons who, at some time and in whatever manner, are beneficiaries or potential beneficiaries of the structure.
2 What needs to be reported ?
2.1 All trusts
Founders and beneficiaries of a foreign trust, need to report the existence of the foreign trust.
2.2 Foundations and companies on the “blacklist”
The reporting obligation only includes foreign foundations and companies, in so far as they are included in the “blacklist” of the Royal Decree that was published in the Belgian Official Gazette on 2 April 2014.
The blacklist includes, by way of example :
Guernsey : Company / Foundation
Jersey : Company / Foundation
Liechtenstein : Stiftung / Anstalt
Luxemburg : Société de gestion Patrimoine Familiale
Netherlands Antilles : Stichting Particulier Fonds
The list will be updated on a regular basis.
3 How to report ?
Reporting must be done annually in the taxpayer’s annual income tax return.
On 28 March 2014, the form of the income tax return for assessment year 2014 (income 2013) was published in the Belgian Official Gazette. In that form, the reporting needs to be made under code XIII.C.
