Recovery of wage tax and withholding tax on dividends, interest or royalties

In a recent circular, the tax authorities confirm their traditional position that the administrative request for the refund of non-assessed wage and withholding taxes is a mandatory (exhaustive) administrative appeal and that it is therefore sufficient to submit such a request within the period provided for in Article 368 of the Income Tax Code 92 (ITC92).

Article 368 of the ITC92 provides for a period of five years within which unassessed wage tax and withholding tax on dividends, interest or royalties can be reclaimed, starting from 1 January of the year in which these taxes were paid. For certain exemptions from withholding tax on dividends, interest or royalties, such as the R&D exemption or the exemption for shift or night work, Article 368/1 ITC92 provides for a period of three years, starting from 1 January of the year following the year to which the assessment year relates.

Article 368 ITC92 and Article 368/1 ITC92 are included under 'Section 1 – Administrative appeal' of the chapter 'Legal remedies'. Consequently, it was generally assumed that these articles prescribe a period within which an administrative tax reclaim (request for refund) must be lodged in order to obtain a refund of the tax.

The tax authorities confirmed this for many years in their guidelines and administrative commentary, pursuant to which the administrative tax reclaim (request for refund) must be regarded as an organised administrative appeal according to the tax authorities. This qualification means, on the one hand, that an administrative tax reclaim (request for refund) must first be lodged before a claim can be brought before the court and, on the other hand, that it is still possible to initiate legal proceedings after a decision on the administrative tax reclaim (request for refund), even after the expiry of the relevant time limit.

However, recent case law has created some legal uncertainty. On 21 December 2023 (F.22.0013.N-F.22.0056.N), the Court of Cassation ruled that Article 368 ITC92 cannot be classified as an organised administrative appeal. The Court also stated that the tax authorities' position, pursuant to which a legal claim for the recovery of unregistered wage tax or withholding tax on dividends, interest or royalties is only admissible after an administrative appeal procedure has been exhausted, is incorrect. In other words, according to the Court, it is not mandatory to first lodge an administrative tax reclaim (request for refund) before legal action can be brought before the court. In addition, the Court clarified that the time limit in Article 368 ITC92 is a prescription period within which the legal action for the refund of wrongfully paid wage tax or withholding tax on dividends, interest or royalties must be initiated.

This view was confirmed by the Constitutional Court on 13 March 2025. The Court ruled that the taxpayer must actually initiate legal action within the relevant period. The period therefore serves as a prescription period, after which the right to a refund expires. The taxpayer can directly initiate legal action to the competent court without first having to submit an administrative tax reclaim (request for refund) to the tax authorities (judgment no. 43/2025).

This case law has major practical implications. Taxpayers who have paid wage tax or withholding tax on dividends, interest or royalties and subsequently discover that this was wrongfully withheld must safeguard their rights within the relevant period by initiating legal proceedings on time. This is all the more important when the administrative tax reclaim (request for refund) procedure is protracted or a decision is not forthcoming. Merely submitting an administrative tax reclaim (request for refund) does not suspend the prescription period. 

The Belgian tax authorities responded on 10 September 2025 with their circular 2025/C/56. In it, they maintain their traditional position: according to the tax authorities, the administrative tax reclaim (request for refund) remains a mandatory (exhaustive) administrative appeal and it is sufficient to submit such a request within the relevant time limit. According to the administration, legal action can still be taken after this period, as long as the administrative tax reclaim (request for refund) was submitted on time. The tax authorities will contest the admissibility of legal actions without prior administrative tax reclaim (request for refund), but will not invoke the statute of limitations against legal actions brought after the five-year period (or three-year period in the case of Article 368/1 ITC92) if the administrative tax reclaim (request for refund) was submitted on time. 

Despite this circular, the risk of prescription remains real. In principle, the court may examine the prescription ex officio, even if the prescription is not invoked by the tax authorities. Taxpayers who have only lodged an administrative tax reclaim (request for refund) but have not initiated legal proceedings within the five-year period (or three-year period in the case of Article 368/1 ITC92) run the risk that the court will consider their claim to be time-barred and declare the legal proceedings inadmissible.

In view of this legal uncertainty, it is advisable, if the end of the relevant period is approaching and the administration has not yet taken a decision, to initiate legal action on time. Legislative intervention, preferably by means of an interpretative law that also confirms past administrative practice, is necessary in any case.