Arizona shortens the tax investigation and assessment periods again 

Arizona update: revised tax investigation and assessment periods (statute of limitations)

The Belgian legislator has revised the tax investigation and assessment periods through the law concerning various provisions of 18 December 2025, published in the Belgian Gazette on 30 December 2025 (NL/FR).

This law introduces new tax investigation and assessment periods with retroactive effect as of tax assessment year 2023, thereby reversing the changes previously adopted in 2022. In the meantime, the tax administration has issued a circular (Circular 2026/C/1) providing guidance on these changes to the statute of limitations.

As a result, two separate regimes will coexist until the old limitation periods have fully expired: one applicable to tax assessment years prior to 2023 and another applicable from tax assessment year 2023 onwards.
 

Rules applicable before the 2023 assessment year

For the tax assessment years prior to 2023, the tax investigation and assessment period is in principle three years, calculated from 1 January of the assessment year for which the tax is due.

An extended period of seven years, starting from 1 January of the assessment year for which the tax is due, applies in case of tax fraud, provided that the taxpayer was notified upfront of the relevant indications of tax evasion. An exception exists when an investigation is initiated by a foreign country with which Belgium has concluded a double tax treaty or information exchange agreement.

A ten-year period is applicable for legal constructions, under specific conditions (subject to the so-called Cayman tax rules).
 

Rules applicable as from tax assessment year 2023

From tax assessment year 2023 onwards, the standard investigation and assessment period is in principle also three years.

A four-year period applies in cases of late or non-filing of a tax return and - regardless timely, late, or non-filing – in case of a "complex" tax return, which mainly includes tax returns with international or cross-border aspects.

Tax returns are considered to be “complex” when they relate to specific situations a.o. filing local files or CBC reports, reporting payments to non-cooperative jurisdictions, when applying withholding tax exemptions based on a DTT or the EU Parent-Subsidiary Directive or Interest- and Royalty Directive, in case of hybrid mismatches, CFCs, and reporting legal constructions under the so-called Cayman tax rules, etc.

Note that when the four-year period applies solely because a return is considered “complex” (and not due to late or non-filing), the fourth year cannot be used to investigate or assess any of the following aspects of the tax return:

• Regional taxes, levies and charges;
• Fines, forfeitures and penalties of all kinds;
• Non-deductible car expenses;
• Non-deductible reception expenses and gifts;
• Non-deductible restaurant expenses;
• Expenses for non-work-related apparel;
• Social benefits, including benefits for meal vouchers, sport or culture vouchers, or eco vouchers.

For these specific aspects, the statute of limitations thus remains three years.

For tax evasion cases, the limitation period extends to seven years and, as before 2023, generally requires prior notification to the taxpayer.
 

Other considerations

Note that exceptions to the aforementioned rules may still apply, both for the regime prior to tax assessment year 2023 and from that year onwards. For example, the audit of tax losses remains possible until actual utilization, even if the standard periods have already expired.

Furthermore, certain specific limitation periods will continue to exist, such as the special investigation periods under Article 358 of the Belgian Income Tax Code. These extended tax and investigation periods remain in force, for example, in cases involving exchange of information from abroad or where conclusive evidence indicates that taxable income was not declared.

In addition, the Law of 19 December 2025 amending the Law of 19 December 2023 introducing a minimum tax for multinational enterprise groups and large-scale domestic groups (‘Pillar Two’) provides a specific six-year investigation and assessment period within the framework of Pillar Two, starting from 1 January of the assessment year for which the tax is due. This limitation period  entered into force immediately upon publication of the law in the Belgian Gazette on 31 December 2025 (NL/FR).

Further, the law concerning various provisions has also aligned the retention period with the applicable limitation period for fraud. This means that books and records must be retained until the seventh year or financial year following the taxable period. This applies both for income tax purposes and for VAT.

In view of the aforesaid, income tax investigation and assessment periods can be summarized as follows:  

Finally, it is worth noting that the law concerning various provisions has also revised the statute of limitations applicable to VAT. The statute of limitation in case of fraud has been shortened and set again at seven years. This reduced fraud limitation period applies to VAT due as from 1 January 2023. As is the case for income taxes, the application of this extended tax assessment period in principle requires prior notification to the taxpayer of the relevant indications of tax evasion. Note that, also for VAT, specific extended tax assessment periods continue to apply, for example also in cases involving the exchange of information from abroad or where conclusive evidence indicates that taxable income was not declared.

In case of any further questions, please reach out to your local EY contacts who will be more than happy to assist you.