The tax ruling illustrated

The tax ruling illustrated

Since the law of 24 December 2002, it has been possible to submit a formal ruling request concerning income tax, VAT, customs duties and excise duties, etc. The taxpayer can use such a request to obtain an advance decision on a specific situation or transaction, which has not yet had any effect on the tax field. However, the advance decision cannot result in a tax exemption or reduction, but only in the application of the tax law. In addition, the decision can be made for a maximum period of five years.

However, it is not unimportant to mention that the tax administration can deviate from its own decision if the situation has changed, if it was incompletely or incorrectly described by the applicant, when the conditions to which the decision was subject are no longer fulfilled, or when the decision is not or no longer in accordance with the law. In essence, the binding force of the prior decision is therefore determined, on the one hand, in the light of the taxpayer's diligence and good faith at the time of the application and during the execution of the decision and, on the other hand, in the light of the legislation in force.

Thus, such a ruling can provide legal certainty on the tax treatment of a certain transaction or situation. However, this legal certainty is not without limits.

We will be happy to assist you in applying for a ruling or in case your ruling is contested by the tax authorities.

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