When gains are realised on physical assets, the tax authorities do not remain on the sidelines. In practice, a discussion often starts with a request for information or a notice of amendment, followed by a more in-depth audit in personal income tax, corporate income tax or VAT.

What initially appears to be a straightforward transaction can quickly develop into a complex tax matter.

What gives rise to discussion?

Physical assets such as art, watches, jewellery, precious metals and collectibles raise several recurring issues in practice.

In corporate income tax, the discussion often concerns the deductibility of costs and whether an investment was genuinely made in the economic interest of the company.

In personal income tax, the greatest risk usually lies in the qualification of the capital gain. What the taxpayer regards as normal management of private wealth is regularly requalified by the tax authorities as miscellaneous income due to speculation, or even as professional income, resulting in a significantly higher tax burden.

VAT discussions may also arise, for example where the tax authorities consider that there is an economic activity. In certain sectors, such as the equestrian sector, we also regularly see discussions about the applicable VAT rate, which may have a significant impact on the tax treatment of transactions.

Finally, we also see discussions in the context of estates and transfers, where the tax qualification of assets and transactions is questioned afterwards, with an impact on both income taxes and inheritance tax.

Our experience

We assist clients in tax proceedings and disputes relating to physical assets, both in the administrative and judicial phase.

Our intervention includes, among other things:

• assistance with requests for information and notices of amendment

• support during tax audits (personal income tax, corporate income tax and VAT)

• drafting and following up objections and negotiations with the administration

• representation in court proceedings before the tax courts

• assistance in criminal matters with a tax component

We act in discussions with, among others, the Special Tax Inspectorate (BBI), local tax offices, Vlabel and the VAT administration, with a focus on qualification disputes, valuation issues and evidence.

Our approach is primarily aimed at achieving a negotiated solution in the administrative phase, without hesitation to bring the dispute before the courts where necessary.

We have extensive experience in discussions with:

• the Special Tax Inspectorate (BBI)

• local tax offices

• Vlabel (in the context of estates and gifts)

• and the VAT administration

Our practice covers both the administrative phase (requests for information, notices of amendment, objections) and court proceedings.

Within the firm, Christophe Romero in particular has built extensive experience in this field, with an initial focus on finding solutions rather than litigating.

Although we assist clients up to and including court proceedings where necessary, our aim is always to reach a workable and balanced solution in the administrative phase.

In practice, in the majority of cases we succeed in reaching an agreement with the tax authorities, while safeguarding the client’s interests as much as possible.