Tax audits are evolving rapidly as a result of digitalization and the increasing use of data. In Belgium, the tax authority now has much more powerful analytical tools than before, enabling it to identify high-risk situations more quickly and target its audits with greater precision.
For businesses and the self-employed, this shift calls for greater vigilance: audits are less random and increasingly rely on automated analyses and data cross-referencing.
Broader use of financial data
The tax authority now has expanded access to various sources of information, particularly through financial transparency requirements and information exchanges between institutions.
Banking data is a key element in this regard. Without necessitating systematic account reviews, financial flows can be analyzed as part of targeted audits or specific investigations.
This information makes it possible, in particular, to:
• verify consistency between reported income and financial transactions;
• detect certain anomalies in flows between companies and executives;
• identify unreported income or transactions.
In this context, obvious inconsistencies between economic reality and tax returns can be identified more quickly.
Cross-referencing data across different tax returns
Another key tool is the automatic cross-referencing of data across different tax databases.
VAT, corporate income tax (CIT), and personal income tax (PIT) returns can now be compared more easily to identify potential inconsistencies. For example:
• discrepancies between revenue reported for VAT purposes and income reported for corporate income tax;
• discrepancies between executive compensation and payroll expenses;
• discrepancies between reported income and certain business expenses.
These analyses enable the tax administration to detect anomalies that might previously have gone unnoticed due to a lack of sufficient processing resources.
Artificial intelligence for audit selection
The tax administration is also developing analytical tools based on statistical models and algorithms to identify cases presenting a higher tax risk.
The goal is not to automate tax decisions, but to more effectively direct audits toward situations exhibiting inconsistencies or atypical profiles.
These tools can notably take into account:
• sector-specific comparisons;
• financial ratios;
• significant deviations from similar profiles.
This approach optimizes the administration’s resources while increasing the likelihood of detecting certain irregularities.
A more targeted approach to audits
Advances in technology are part of a broader trend: tax audits are becoming more targeted and analytical.
Rather than increasing the number of random audits, the tax authority now prioritizes interventions based on the prior identification of risks.
For businesses and self-employed individuals, this shift underscores the importance of:
• the overall consistency of tax returns;
• the traceability of financial transactions;
• the documentation of significant decisions and transactions.
Our mission in the field of corporate taxation is to help you manage a reasonable tax burden that aligns with your income and the opportunities provided by tax legislation.
