Since 8 August, Belgian taxpayers have been able to declare untaxed income and assets through a new procedure for fiscal regularisation. “At last we can file dossiers. Many families have been waiting a long time to unlock their old assets,” says tax law firm Deknudt Nelis Advocaten, based in Kortrijk and Antwerp.
The fiscal regularisation is an initiative of Belgian Prime Minister Bart De Wever’s government. Families can repatriate undeclared or “grey” money from abroad, declare it, and in return obtain immunity from prosecution. The penalty is steep: 30 percentage points on top of normal tax rates for non-prescribed capital and 45 percent for prescribed capital. The system has been operational for just over a month, with filings to be submitted to Belgium’s Contact Point for Regularisations.
Luxembourg context
For Luxembourg, this new framework has immediate relevance. Many Belgian families with wealth parked in the Grand Duchy face questions from their private bank or insurer about the origins of older assets. Since the abolition of Luxembourg’s banking secrecy in 2013 and the adoption of automatic information exchange, institutions are under pressure to ensure that clients can demonstrate tax compliance. Where proof is lacking, bankers increasingly point Belgian clients towards the fiscal regularisation route as the only way to keep accounts open and funds usable.
Cross-border flows are already emerging. Past amnesties saw significant sums move from Luxembourg back into Belgium’s tax net, and compliance experts expect the same dynamic under the new permanent regime. For Luxembourg’s wealth managers, this means not only preparing for possible outflows but also actively guiding Belgian clients through the process. In many cases, the push to regularise does not come from the tax authority itself, but from the compliance departments of Luxembourg’s own financial institutions.
Investment Officer Belgium spoke with Sven Nelis en Guillaume Deknudt, partners of the law firm, about the new regularisation process.
IO: Is there demand among your clients for this new round of fiscal amnesty?
Nelis: “Yes, and the financial sector plays an important role in that. We often hear from clients that their bank insists everything be in fiscal order before certain funds can be repatriated. Foreign insurers can also require a regularisation if Belgians wish to cash in a life insurance policy. Underlying these requests is preventative anti-money laundering legislation. The financial sector wants clarity on the origin of funds and the certainty that all taxes have been paid, even if it concerns a very distant past. If a client cannot prove this, fiscal regularisation becomes unavoidable.”
IO: Is it mainly the children of tax evaders who are now seeking forgiveness?
Nelis: “More and more, we see that the request comes from the children, and sometimes grandchildren, of the person who originally committed the tax fraud. In many of our cases, the initial perpetrator has already passed on the wealth, and in some cases is no longer alive. Most dossiers go quite far back in time.”
IO: What kind of sums are involved?
Deknudt: “It can range from tens of thousands of euros to several millions. As Sven mentioned, it often concerns older capital. The generation that earned the money and was unable to correct matters with the tax authorities is gradually disappearing.”
“The next generation increasingly prefers to see it resolved. Also because in many cases the capital is effectively unusable. Without regularisation, funds remain blocked or frozen, which makes them economically inactive. That is often the driver to act and bring everything into order.”
IO: The penalty rate for prescribed capital is 45 percent. Do clients find that excessive?
Deknudt: “It depends. For someone who worked entirely off the books in terms of professional income, one can argue that such an all-in rate of 45 percent is actually low to settle past fraud. But for someone who only failed to declare interest or dividends, 45 percent is a high rate – especially compared with the old rate of 15 percent for withholding tax. We somewhat regret that the government opted for a one-size-fits-all approach and applied the same penalty rate to all prescribed taxes.”
IO: The first ‘one-off liberating declaration’ dates back to 2004. We are now at the fifth round. Is this truly the last one?
Deknudt: “The government has made the arrangement permanent. There is no longer an end date. Unless a future government introduces a different scheme, this is the final and definitive framework.”
“As tax lawyers, we believe it is positive that there is now a permanent structure. There was no real reason to end the previous scheme. It would have been better to let it continue, perhaps with a higher rate. What we have seen is that for one and a half years – from early 2024 until mid-2025 – fiscal regularisation was not possible at all. That there was no scheme for someone who wanted to proactively and preventively settle past irregularities was actually unheard of. In theory, it was possible through the courts, but in practice that did not work.”
IO: Will you now be submitting dossiers en masse to the Contact Point?
Nelis: “We will do so gradually. Before a formal submission, there is the option to present the dossier anonymously to the Contact Point, where you receive an estimate of the penalty. That is an important tool: we can tell the client what the fiscal regularisation would cost. The client can then still decide: ‘If that is the case, I will not proceed.’ But in that case the assets remain blocked, and the risk persists that the file may eventually end up with the public prosecutor’s office.”
This article was originally published on Investment Officer Belgium.