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 first issue. The second will be discussed in a separate article.
1. The special assessment period under article 358, §1, 3° ITC 92
Pursuant to article 358, §1, 3° ITC 92, tax or additional tax may still be assessed even after the ordinary assessment period of 3 or 7 years referred to in article 354 ITC 92 has expired, where legal proceedings reveal that taxable income was not declared during one of the five years preceding the year in which the proceedings were initiated.
Under article 358, §2, 2° ITC 92, the tax authorities have a period of 12 months to issue the assessment, calculated from the date on which no further opposition or appeal may be lodged against the decision rendered in those proceedings.
2. No application in the case of a criminal investigation dismissed without prosecution
It was previously argued that the special assessment period cannot apply where a criminal investigation conducted by the Public Prosecutor's Office ends with a dismissal decision, due to the absence of a valid starting point for the assessment period.
In a judgment of 23 February 2018, the Belgian Supreme Court held that a dismissal decision does not constitute a decision rendered in the judicial proceedings referred to in article 358, §1, 3° ITC 92 (Cass., 23 February 2018, F.17.0078.F).
Subsequently, in a judgment of 10 November 2022 (Constitutional Court, 10 November 2022, No. 144/2022), the Constitutional Court ruled that Articles 358, §1, 3° and §2, 2° ITC 92 are incompatible with articles 10, 11 and 172 of the Belgian Constitution if interpreted as meaning that, where criminal proceedings initiated through the opening of a criminal investigation are dismissed, no assessment period within which the tax or additional tax assessment must be issued begins to run. The Court considered it unacceptable for a taxpayer whose tax situation is under review to remain indefinitely uncertain about their fiscal position.
Despite this case law, the tax administration continued to take the position that the special assessment period remained applicable where a criminal investigation ended with a dismissal decision. In response to the Constitutional Court's criticism, it argued that an alternative starting point for the assessment period could be relied upon (namely the expiry of the criminal statute of limitations) or, at the very least, that the assessment could still be issued within a "reasonable period".
However, in a judgment of 26 March 2025, the Brussels Court of Appeal confirmed that the combined effect of the case law of the Supreme Court and the Constitutional Court leads to the conclusion that the special assessment period cannot be applied where a criminal investigation conducted by the Public Prosecutor's Office ends with a dismissal decision.
Although the Minister of Finance endorsed this interpretation in response to a parliamentary question, an appeal before the Supreme Court was nevertheless lodged against that judgment. While this apparent inconsistency raises certain questions, it falls outside the scope of the present contribution.
In its judgment of 21 May 2026, the Supreme Court aligned itself with the Brussels Court of Appeal.
On the one hand, the Court stated that the expiration of the statute of limitations for criminal prosecution cannot serve as the starting point of the 12-month assessment period. On the other hand, it stated that the fact that the tax administration issues the assessment before, or within a reasonable period after, the dismissal decision does not alter the fact that the taxpayer remains indefinitely uncertain about their tax position. In the absence of a starting point for the 12-month assessment period, the tax administration would be able to issue additional assessments without any temporal limitation. In light of the above-mentioned case law of the Constitutional Court, it must therefore be concluded that Articles 358, §1, 3° and 358, §2, 2° ITC 92 are incompatible with Articles 10, 11 and 172 of the Belgian Constitution in such circumstances.
By doing so, the Supreme Court appeared to bring this debate to an end.
Or perhaps not entirely.
3. The importance of the timing of the dismissal decision
In the meantime, the Ghent Court of Appeal has referred a preliminary question to the Constitutional Court in a similar context.
In the proceedings pending before the Ghent Court of Appeal, a tax assessment had been issued pursuant to article 358, §1, 3° ITC 92 before the dismissal decision was rendered. In light of the above-mentioned case law, the taxpayer argued that the assessment should be annulled, irrespective of the fact that it had been issued prior to the dismissal decision. According to the taxpayer, whether the assessment is issued before or after the dismissal decision, no assessment period within which the tax assessment or additional assessment must be issued begins to run.
The tax administration, by contrast, maintains that the above-mentioned case law is only relevant where the assessment is issued after the dismissal decision.
The Ghent Court of Appeal has therefore asked the Constitutional Court whether the application of this special assessment period in such circumstances violates the constitutionally guaranteed principle of equality and non-discrimination, possibly read in conjunction with the right to a fair trial and the principle of equality of arms under article 6 of the European Convention on Human Rights ("ECHR"), as well as the right to property and the principle of foreseeability under article 1 of the First Additional Protocol to the ECHR.
In the judgment of 21 May 2026 discussed in this article, the Supreme Court already took the view that taxpayers against whom an assessment is issued before (or shortly after) the dismissal decision under article 358, §1, 3° ITC 92 likewise remain indefinitely uncertain as to their tax position.
In light of the Constitutional Court's judgment of 10 November 2022, the Supreme Court therefore considered that article 358, §1, 3° ITC 92 is equally incompatible in such circumstances with articles 10, 11 and 172 of the Belgian Constitution.
It remains to be seen whether the Constitutional Court will adopt the same position, although such an outcome would certainly appear desirable.
Indeed, it should not be overlooked that the special assessment periods constitute exceptions to the ordinary and extended assessment periods under article 354 ITC 92 and must therefore be interpreted strictly. In cases involving tax fraud, the tax administration already benefits from an extended assessment period of seven years in order to carry out tax reassessments. The special assessment period under article 358, §1, 3° ITC 92 could therefore be reserved for situations in which a criminal investigation effectively results in a judicial investigation or criminal prosecution.
In any tax procedure, careful attention must always be paid to compliance with the taxpayer's procedural safeguards.
Authors:
Pieterjan Smeyers, Tax Partner at Andersen in Belgium
