In a judgment dated 21 May 2026, the Belgian Supreme Court addressed two significant procedural issues in tax matters.
The first concerns the application of the special assessment period provided for in article 358, §1, 3° of the Belgian Income Tax Code 1992 (“ITC 92”) where a criminal investigation results in a dismissal decision.
The second concerns the extent to which a judge is required to examine, ex officio, whether a disputed assessment can be upheld. More specifically, the question arose in a situation where an assessment was annulled due to the wrongful application of the special assessment period under Article 358, §1, 3° ITC 92. In such circumstances, must the judge, ex officio, determine whether the assessment can nevertheless be upheld on the basis of another assessment period if the tax authorities fail to invoke the applicability of such an alternative assessment period?
This contribution focuses on the second issue. The first issue is discussed in a separate article, which you can read here.
1. The Public Policy Nature of Taxes
According to established case law of the Supreme Court, taxes are a matter of public policy (openbare orde/ordre public). Consequently, when invited to do so by the claims submitted by the parties, the court must itself determine, both in fact and in law, whether the tax debt exists. In doing so, the court is not bound by the legal grounds on which the tax administration relied when establishing the assessment and must also rule on any other grounds invoked by the administration before the court to justify the levy. Where necessary, the court must even raise its own legal grounds if these are capable of justifying the assessment.
This case law is frequently criticised in tax doctrine.
The starting point is that a taxpayer must be informed, prior to the issuance of a tax assessment, of the grounds on which that assessment will be based. In income tax matters, this occurs through the notice of amendment or the notice of assessment ex officio.
However, this obligation to properly motivate the tax assesment loses much of its significance if the tax administration is subsequently allowed to invoke entirely different grounds before the courts to justify the assessment.
Moreover, even where the tax administration does not invoke additional grounds, the court would still have a duty to identify and formulate the justification for the assessment itself, effectively stepping into the administration’s role.
This creates a fundamental imbalance between the respective rights and obligations of the tax administration and the taxpayer, thereby opening the door to arbitrariness.
2. The Principle of Party Disposition
In its judgment of 21 May 2026, the Supreme Court clarified that its case law regarding the public policy nature of taxes cannot be viewed in isolation from its case law concerning the principle of party disposition (beschikkingsbeginsel/principe dispositif).
Under this general principle of law, the court is required to resolve the dispute in accordance with the legal rules applicable to it. The court must examine the legal nature and consequences of the facts and legal acts relied upon by the parties and may, irrespective of the legal characterisation given by the parties or the legal consequences they attribute to them, supplement, modify or replace the legal grounds put forward by the parties of its own motion, provided that it does not raise a dispute whose existence has been excluded by the parties in their written submissions, relies only on elements duly submitted before it, does not alter the subject matter of the claim, and respects the parties’ rights of defence.
The principle of party disposition does not, however, require a court to raise ex officio every conceivable legal argument. The court is only required to raise legal grounds whose application is dictated by the facts specifically invoked by the parties in support of their claims.
3. The Parties Remain Responsible for Defining the Scope of the Debate
Within the framework of the principle of party disposition, the court thus plays an active role in assessing the dispute. This cannot, however, mean that the parties may remain passive observers or be relieved of their responsibility to advance the legal grounds and arguments on which their claims are based.
If it were accepted that parties no longer needed to submit arguments and that the court had to independently and without limitation supplement all possible legal grounds, this would lead to an undesirable shift in the conduct of proceedings. The court would no longer act as an impartial arbiter but would effectively determine the debate itself and take the place of the litigating parties. Such an approach would be contrary both to the principle of party autonomy and to the right to a fair trial guaranteed by Article 6 of the European Convention on Human Rights.
The principle of party disposition therefore constitutes an important limitation on the public policy nature of taxes.
Accordingly, a party cannot refrain from invoking specific legal grounds in support of its position – despite the facts of the case clearly warranting them – under the pretext of the court’s active role, while adopting a passive stance in the expectation, or even with the intention, that the court will raise those grounds on its behalf.
4. The Tax Administration’s Passive Approach Is Sanctioned
In the case at hand, the contested assessment was based on the special assessment period provided for in Article 358, §1, 3° and §2, 2° ITC 92. The taxpayer challenged the applicability of that assessment period from the outset.
Although the tax administration had ample opportunity during the proceedings – no less than eight years – to invoke, at least in the alternative, the applicability of another assessment period, it failed to do so.
Only in its appeal before the Supreme Court did the tax administration argue that the court itself should have examined ex officio, and thus instead of the administration, whether another assessment period available to the tax administration could have been applied.
The Supreme Court reiterated that a court indeed has a duty to raise ex officio legal grounds whose application is dictated by the facts specifically invoked by the parties in support of their claims or defences. This duty also extends to facts that the court itself derives from elements duly submitted by the parties.
The Court clarified, however, that this does not mean that a court is required to examine every possible legal rule that might apply in light of the established facts of the dispute but was not invoked by the parties. Rather, while respecting the rights of defence, the court must only examine the possible application of legal rules not invoked by the parties where those rules are unmistakably called for by the facts specifically relied upon by the parties or by facts derived by the court from the elements duly submitted before it.
The Court then noted that the tax administration had relied exclusively on the special assessment period under Article 358, §1, 3° and §2, 2° ITC 92 and had not alleged the existence of tax fraud. As a result, the administration had not specifically submitted facts that would have required the court to examine ex officio whether the assessment could be upheld pursuant to Article 354, paragraph 2 ITC 92.
In other words, one party cannot place the entire conduct of proceedings in the hands of the court and expect the court to independently identify the applicable legal grounds. An excessively passive attitude on the part of the tax administration relieves the court of any duty to examine whether the assessment can be upheld.
This judgment represents an important step towards restoring the balance between the respective rights and obligations of the tax administration and the taxpayer.
Authors: Pieterjan Smeyers, Tax Partner at Andersen in Belgium
