As you may have seen in the press recently, Belgium’s tax authorities have beefed up their position on “secret commissions tax”.

Belgian tax law requires employers and companies to report all pay elements on individual salary documents. If they fail to report pay properly and in time, a special (tax-deductible) tax is charged on the unduly reported income at a rate of 309%, what’s generally known as “secret commissions tax”. In the past, the tax often was not charged if the benefit was still charged to the beneficiary during a tax audit or if the company agreed to treat the unreported benefit as a disallowed expense (with the tax inspector’s acquiescence). In the latter case, only a “fine” of 33.99% was paid (in the form of corporation tax). New guidelines now put a stop to this practice: the 309% tax will be levied in all cases.

The new tack mainly targets directors of close companies who receive taxable benefits that are not properly reported, but the net is cast wide and also covers other companies and employers. Given the potential sums at stake, you’re therefore best advised to review your payrolls and check that all benefits and pay items are duly reported as they should be.