The Belgian tax authorities last year set a record for the number of bank accounts investigated, as part of an intensified search for people hiding their money in secret accounts to avoid paying tax.
Last year the authorities used their powers to look into 41,280 bank accounts – the highest number ever, and roughly twice as many as four years before.
But the main target of these investigations is not the major tax evaders like multinational companies and the wealthy – who usually have the resources to employ experts who can hide income from the authorities by complex money transfers in tax havens around the world.
Rather the investigation tends to concentrate on smaller offenders, mainly those who have tax arrears and penalties to pay, and who have money cached in accounts where it is hoped it will be safe from the eyes of the authorities.
For normal people, when the tax authorities encounter a case of unpaid taxes, there are various procedures to organise payment of the sums owed and the penalties for non-payment. If that does not work, the authorities can place an order on the person’s income, allowing them a certain sum for basic living expenses and taking the rest towards paying off the arrears.
However some people try to get around that block by diverting some funds into another bank account where they believe the tax authorities cannot reach it. But that belief is increasingly proving to be mistaken.
In 2014 the National Bank set up a register of all bank accounts in Belgium linked to individuals, companies and other legal persons – such as non-profit organisations.
Tax authorities have access to this central register, and the growth of the number of consultations has been huge: from 2,722 cases in 2014 and 9,946 in 2015 up to 41,280 in 2019 and 26,219 in the first half of this year – well on the way to a new record.
The main reason for the growth has been to investigate ways in which people hide their income after being ordered to pay back-tax and penalties, rather than cases of tax fraud as such.
“The figures don’t lie: for the recovery of tax debts it is very efficient that we can now immediately check which accounts people have,” Francis Adyns, spokesperson for the tax authorities told De Tijd.
“We didn’t have a complete overview in the past. It is sufficient that we find an account that we were not yet aware of, to garnish its balance, because that is permitted for tax debts. It does not even require the intervention of a bailiff. In addition to other things, such as a person’s wages or rent, we can also seize the balance on bank accounts.”
Fraud investigations are much more complex, Adyns explained.
“If you have knowledge of a bank account, you still have to check what is in that account, whether there is hidden income in, and where those sums of money come from.”