“DLU II” should bring €1.4 billion into the Treasury

  • “DLU II” has been closed since Monday: in seven and a half years, 26,868 regularization requests have been filed, including 17,211 in 2013
  • The estimate is that almost €5 billion has been declared to the taxing authority

Up until the last minute, “repentant cheaters” rushed to drop their regularization documents into the mailbox of the Point of Contact of the Anticipated Decisions Service, at 22 Rue de la Loi in Brussels. The mailbox was accessible until 5:59 a.m. Monday.

In two weeks, 10,255 files were dropped off. That’s almost twice the number received during the first six months of the year.

It is still certainly possible to put things in order with the taxing authority. However, the new regularization system will be for a “fixed term” (until December 31) and, above all, more expensive.

That’s why a large number of tax cheats finally decided to take advantage of “DLU II,” which has been available since January 1, 2006.

Can we draw some preliminary conclusions? Over seven and a half years, 26,868 regularization requests have been submitted, including 17,211 in 2013. Essentially, they are for undeclared personal income.

We still do not know the total amount of income “updated” under the plan. The very rough estimate is close to €5 billion.

As of June 25, a total of €3.27 billion had been declared, based on 15,509 requests.

11,378 requests have been received since then. What is the total amount?

In reality, it’s estimated, by analyzing data provided by the taxing authority, that the average amount regularized was less this year. Between 2006 and 2012, the average amount per request was €240,000; in 2013, it only reached €150,000. In other words, the smaller fish were forced to regularize their tax situation in the last few months.

If we assume that the average amount is the same for all requests made in 2013, the 11,000 or so requests filed since June 26 should have regularized an additional 1.7 billion.

Under these assumptions, “DLU II” should have allowed a similar amount to be regularized, as did the 2004 DLU – the real DLU. It’s true that we’ve gotten into the habit of calling everything DLU.

To refresh our memories, the 2004 DLU (one-time discharge declaration) was an amnesty: “repentant cheaters” only had to pay a penalty of 6 or 9% on the money that was not declared. There were no taxes to pay, even if the regulations had not yet produced the intended effects. The DLU brought in €498 million to the state’s coffers.

9,000 requests settled

On the other hand, “DLU II” was a regularization (that is also the term used in the law): in addition to penalties, the “repentant cheaters” have to pay the tax they avoided.

How much has it already brought in? At the end of June, a few more than 9,000 requests have been settled, for a total amount declared of €2.2 billion, allowing the tax authority to recover €619 million (penalties and taxes due). That means an average “taxation rate” of 28%.

Going back to our previous estimate, which has to be taken with a large grain of salt, the total receipts of “DLU II” might reach €1.4 billion. The state could then hope to receive another 800 million or so…when all of the requests have been settled. As mentioned previously, only a few more than 9,000 requests have been completed. The taxing authority has not yet settled all requests submitted in 2012.

Requests made under “DLU III” will have to be added to the 2013 “DLU II” requests. The “regularization” service has its work cut out for it…

D.B.

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