Tax authorities publish circular letter on withholding tax refund claims addressing (and creating) legal uncertainty

The Belgian tax authorities issued a circular letter on 10 September (n° 2025/C/56) concerning the interpretation of Articles 368 and 368/1 ITC.

Article 368 ITC provides for a five-year period to reclaim non-assessed (professional) withholding tax (‘bedrijfsvoorheffing en roerende voorheffing’ / ‘précomptes professionnel et mobilier’). Article 368/1 ITC introduces a similar three-year period regarding professional withholding tax exemptions (e.g. the R&D exemption or the exemption for shift work, etc.). It should be noted that according to the wording of both Articles, the period included in Article 368/1 ITC starts running a year later than the period included in Article 368 ITC.

Existing administrative practice applies as follows: taxpayers who want to reclaim taxes withheld in the year X, have until 31 December of the year X+4 (resp. X+3) to introduce a tax refund claim. Such refund claims are considered to be an administrative appeal, leading to a situation where the taxpayer can then, if needed, introduce a legal action before the competent court at a later time (in case of absence of decision regarding the claim or in case of rejection).

Recent case law from both the Court of Cassation and the Constitutional Court led to uncertainty regarding the application of Articles 368 and 368/1 ITC, leaving taxpayers in a difficult situation regarding the handling of their claims. The uncertainty mainly concerns whether the five-year statute of limitations applies solely to the filing of the refund request with the tax administration or also to the initiation of the legal action.

Legal background to the uncertainty

In its judgment of 21 December 2023 (F.22.0013.N-F.22.0056.N), the Court of Cassation ruled that the legislator introduced a prescription period with Article 368 ITC “within which the ‘legal action’ [...] must be initiated. If the withholding taxes were not assessed and no notification of their collection occurred, there is no administrative decision against which a tax refund claim can be filed” (free translation).

The Court consequently concluded that a taxpayer can also claim a reimbursement of the non-assessed withholding taxes by initiating a ‘legal action’ before the competent courts. In other words, there is no obligation to first file a tax refund claim with the tax authorities.

Referring to the Court of Cassation’s judgment of 21 December 2023, the Constitutional Court confirmed on 13 March 2025 that, when seeking reimbursement of non-assessed withholding taxes, the taxpayer can directly initiate legal action before the competent courts without first having to file a tax refund claim with the tax authorities (judgment n° 43/2025).

The Constitutional Court further clarified that the ‘legal action’ (i.e., the court proceedings) must, in all cases, be initiated within the five-year period, which then serves as the statute of limitations for the taxpayer, after which the refund claim becomes time-barred.

Therefore, it is insufficient for the taxpayer to simply submit a tax refund claim with the tax authorities within the five-year statute of limitations period.

Hence, according to the Constitutional Court, a taxpayer having already filed a tax refund claim with the tax authorities must still initiate legal action before the competent courts within the five-year period. The tax refund claim neither suspends nor interrupts the five-year statute of limitations.

Point of view of the Belgian tax authorities

With circular letter 2025/C/56, the tax authorities chose to address the current uncertainty.

Belgian tax authorities do not concur with the (however clear) judgment of the Court of Cassation of 21 December 2023. They consider that a preliminary tax refund claim is still required for a legal action to be considered admissible before the Court. In their circular letter, the tax authorities state that they will challenge the admissibility of legal actions directly brought before the competent court, instead of first filing an administrative tax refund claim.

On the other hand, the tax authorities clarify that they do not consider that Article 368 ITC establishes a statute of limitations within which legal proceedings need to have been initiated. Consequently, they will not challenge the admissibility of legal actions before the courts when the taxpayer filed a tax refund claim within the five-year period but brought the case before the court after the five-year period had expired.

Uncertainty persists

It is understandable that the tax authorities felt obliged to intervene following the (in our view) questionable judgment of the Constitutional Court dated 13 March 2025. However, regrettably, the new circular letter does not resolve all uncertainties.

Firstly, one could argue, considering the aforementioned case law, that the circular letter is contra legem. The Court of Cassation clearly stated that no administrative appeal should be initiated, but the circular letter contradicts this position.

Secondly, if Article 368 ITC was intended by the legislator to establish a statute of limitations, can a taxpayer be certain that a court would not dismiss a legal action filed after the five-year period as time barred? Overall, while the tax authorities deserve credit for attempting to offer a practical solution, the legislator should still intervene to provide a legally binding resolution.

What should taxpayers do?

Given the continuing uncertainty, it is advisable to proceed with caution in cases involving refund claims for non-assessed (professional) withholding taxes under Article 368 and/or Article 368/1 ITC. Taxpayers should evaluate whether these requests risk exceeding the five-year (resp. three-year) period by the end of 2025 (or any subsequent year).

In such cases, taxpayers should consider initiating legal action before the competent courts before 31 December 2025, even if a tax claim has been introduced. This will effectively eliminate any arguments that the claim is time-barred.

If no tax refund claim has been filed and the statute of limitations is due to expire by the end of 2025, the ideal course of action would be to submit the tax refund claim, before initiating legal proceedings, by 31 December 2025. However, a challenge by the tax authorities regarding admissibility cannot be ruled out, as the tax refund claim must, under normal circumstances, be filed at least six months prior to the taxpayer initiating legal action.

Therefore, it is advisable to verify whether you have any such (pending) refund claims and to assess whether these claims will reach the statute of limitations by the end of 2025. Specifically, for requests filed with the tax authorities under Article 368 ITC, this pertains to claims relating to tax year 2021; whereas for claims filed with the tax authorities under Article 368/1 ITC, it concerns claims relating to tax year 2022.

For cases relating to earlier years that have already exceeded the statute of limitations, we believe that these new developments do not trigger any specific action.

Should you encounter any issues related to the above or have any questions on this matter, please do not hesitate to contact us.