Government insists tax dodge law a success
18 February 2005, BRUSSELS – The Belgian government has insisted it's so called foreign tax dodge law was a success after revealing that the one year tax amnesty netted EUR 100 million more than the majority of the country's media predicted on Thursday.
18 February 2005
BRUSSELS – The Belgian government has insisted it's so called foreign tax dodge law was a success after revealing that the one year tax amnesty netted EUR 100 million more than the majority of the country's media predicted on Thursday.
Late on Thursday Finance Minister Didier Reynders said that the tax amnesty had seen nearly EUR 500 million (precise figure EUR 496,240,916) returned to Belgium from overseas bank accounts.
Earlier in the day most of the Belgian media had predicted that the amnesty would net just EUR 400 million, under half the EUR 850 the government said it hoped to bag when it originally unveiled the legislation.
Under the tax amnesty, which was in place throughout 2004, anyone liable for tax in Belgium who had undeclared earnings in a foreign bank account was asked to fill in a special form called a One Time Voluntary Declaration (Declaration Liberatoire Unique in French or Eenmalige Bevrijdende Aangifte in Dutch.)
People who filled in declarations had to agree to repatriate their foreign nest eggs but only had to pay a relatively low punitive level of tax on their money.
At a press conference on Thursday Reynders insisted that the system had been an "unexpected success"
He said that while the government had initially hoped to net EUR 850 million through the scheme, by last autumn it had reduced its expectations considerably.
This meant the final haul of nearly EUR 500 million was well above what it had hoped for, Reynders insisted.
"Last October, we reduced our estimation to EUR 350 million. And finally, during the recent presentation of the state’s accounts, we stated EUR 200 million," he told journalists.
Cynics point out however that the government is still EUR 350 million short of the original EUR 850 million it had hoped to bag.
But despite such observations, most experts do seem to be genuinely surprised by the final amount the scheme netted.
Analysts say the last-minute nature of most of the DLU declarations was the reason why nearly all of the predictions about the total amount the tax amnesty would bring in were on the low side.
By 15 December, there was just EUR 98 million in the state’s coffers from the scheme.
"We got 81 percent of the declarations in December," explained Luc Vandewalle, president of the Belgian Banking Association.
"It was unexpected. The sums collected are all surprising too. The One-Time Voluntary Declaration is a success."
Reynders said: "The Belgians don’t change: they waited until the last minute to make their declarations."
The minister added that EUR 75 million of the fines paid in return for legally returning money to Belgium would go to the country’s regions.
The other EUR 400 million or so would go to the state pension fund.
Very few individuals who took advantage of the scheme committed to invest their money in Europe for at least three years.
Only 7.4 percent paid the lowest tax fine of 6 percent.
Some 90 percent preferred to pay the highest rate of 9 percent in order to be free to invest their money however they wanted.
In total, 18,543 people made declarations, with the average paying a fine of EUR 26762.
[Copyright Expatica 2005]
Subject: Belgian news