Is it still advantageous to apply for a federal tax ruling?

After all, the ruling must be binding on all departments of the FPS Finance in the case of a later audit. A ruling cannot have effect if:

• the taxpayer does not carry out the transaction under the conditions as indicated; or
• if the ruling is not in accordance with international, European or Belgian law.

If the FPS Finance nevertheless wishes to apply a different interpretation of the tax law during an audit, it must demonstrate that the legal position has changed. This is possible if the legislator has clarified the tax law or a supreme court (Belgian Supreme Court, European Court of Justice, Belgian Constitutional Court or Belgian Council of State) has ruled on the interpretation of the tax rule.

Unfortunately, in practice it must be noted that the legal certainty offered is too often undermined by the FPS Finance itself, which, apart from the aforementioned exceptions, nevertheless decides to ignore the ruling due to a different interpretation of the tax law.

This evolution is regrettable, since the system of “preliminary consultations” previously introduced in the Netherlands has proven to be a great success. There are therefore no known lawsuits in the Netherlands in which the Tax Administration would have disregarded a ruling and nevertheless decided to tax.

This finding threatens the credibility of the federal ruling practice. If you wish to apply for a ruling, you should therefore keep in mind that there may still be a discussion with the tax authorities during a later audit.