When a local tax control questions an expatriate on the maintenance of the centre of its economic and social interests because he lives ....... a difficult separation in fact and on the question of knowing if the tax advantage of the Circular of  08.08.1983 is well allotted to the employer because it would be paid on the basis of a gross remuneration !

An expatriate is in Belgium since about fifteen years certainly but he maintains the centre of its economic and social interests abroad, he even has reinforced them. The couple separates in 2006. Facing an already difficult situation the local control concludes nevertheless that the executive from now on establishes the centre of its economic and social interests in Belgium whereas he is more “free” than never. This intervention of the local tax control is all the more unhappy as it is done without any dialog with the service of the foreign tax Director. If such a dialog had taken place the local tax control would have noted that five years ago the maintenance of the special tax statute was granted to the expatriate after a detailed analysis of his file.

In addition to this astonishing situation it should be noted that the local tax control considers that the executive does not bring the proof that the tax advantage of the special tax status is turned over to the employer since..... the non taxable allowances are calculated on the basis of a gross remuneration. In addition to the fact that in 27 years of career it is one of the very rare times I see a local tax control requiring that the executive brings such a proof, the executive is here paid on a net basis. The local tax control having (still) not understood that it is impossible to compute a net remuneration without passing by a gross remuneration.

We are astonished, moreover, that a local control “Foreigners” deals only with the executive to question a statute mainly asked by the employer and incidentally by the executive. The challenge of the expatriates’ status should be done with respect to the applicant who is mainly the company. In addition, we also question ourselves as to know if a local control is entitled to challenge a decision of the Director “Foreigners”. Logic would be that a local control announces its doubts to the service of the Director “Foreigners” and that then this last one questions the company. As this Circular is illegal we are convinced that any Court could only follow our point of view considering these same Courts took the practice to comment this Circular by avoiding any discussion of its legality.

The behaviour of the local Control in question in the reported case will only cause to make not very credible the unicity of the administrative jurisprudence for the treatment of the dispute of these files.

Conclusion.
I do not certainly say that tax audits should not be carried out but one could expect, nevertheless, more “suitable” and thus relevant questions. Moreover an equitable treatment and in the strict respect of the Circular even requires that any challenge of the “special statute” be only carried out by the service of the Director “Foreigners ” near the applicant i.e. the employer.


Stephen G Hürner
Tax Adviser