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FATCA Law published
 
The law of 16 December 2016 regulates the “communication of information relating to financial accounts by Belgian financial institutions and the Ministry of Finance in view of the automatic exchange of information on an international level and for tax purposes”. It was published in the Belgian State Gazette on 31 December 2015.

The act introduces the Belgian rules that are necessary to allow Belgium to comply with various instruments subscribed by the Belgian government to comply with its obligations under

- the Intergovernmental Agreement to implement FATCA in Belgium (“Agreement between the Government of the Kingdom of Belgium and the Government of the United States of America (US) to Improve International Tax Compliance and to Implement FATCA” (IGA)), signed on 23 April 2014,

- the Multilateral Competent Authority Agreement on automatic exchange of information, that will apply as of 2017; and

- EU Directive 2014/107/EU, amending the Mutual Assistance Directive on administrative cooperation in the field of taxation (2011/16), to be implemented on 31 December 2015 ; it will apply as of 2016.


The Act provides a framework obliging Belgian qualifying financial institutions and insurance companies to identify and verify account holders and their accounts, with certain due diligence duties and procedures, to exchange information automatically, to retain the information and protect the privacy of the personal data of the account holder.

This framework is heavily inspired by on these three international instruments and makes, mainly in the annexes to the Act, the distinctions between Belgium's obligations under the FATCA Intergovernmental Agreement, the Multilateral Competent Authority Agreement on automatic exchange of information and Directive 2014/107/EU. The specific due diligence rules which qualifying financial institutions and insurance companies must comply with can be found in the annexes. 

One important feature is that the retention period for the financial data, as well as the period during which the Belgian tax authorities can investigate the communication of information is one year more than the standard period in the Income Tax Code. Moreover, the Act also obliges financial institutions and insurance companies to wipe out the data after this period.

This publication gives the green light to the Belgian tax authorities to report to the US under the FATCA Intergovernmental Agreement. The deadline for the Belgian tax authorities to report to the IRS was originally set at 30 July 2015, but the deadline is now moved from 30 September 2015 to 30 September 2016.

The Act has entered into force as of 10 January 2016 for the banks' obligations under the FATCA Intergovernmental Agreement and under the EU Directive (that is the 10th day following publication in the Belgian State Gazette). As for the exchange of information with any other jurisdictions, a royal decree will determine when the Act enters into force.

Belgian financial institutions need to report the information required by the FATCA Intergovernmental Agreement in respect of 2014 to the Belgian Tax Authorities by 10 January 2016. However, on its e-services web page, the Belgian tax authorities have already confirmed that they will be flexible and that they will give financial institutions one month from publication to report the 2014 FATCA information to the Belgian tax authorities.

Marc Quaghebeur
De Broeck Van Laere & Partners



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