No tax increase in the event of a first error committed in good faith: Clarifications from the tax authorities

On 28 July 2025, the FPS Finance issued Circular 2025/C/49, clarifying a new tax rule introduced by the Programme Law of 18 July 2025: no tax increase shall apply in the event of a first error committed in good faith in a tax return, as a presumption of good faith is now legally established. Clarifications were awaited as to how the tax administration would implement this measure in practice. 

The presumption of good faith applies to tax assessments issued as from 29 July 2025 to any first offence identified in a tax return, whether by an individual or a legal entity, provided that no intent to evade tax has been established. This presumption also applies in cases where an inaccurate return results in an exemption from the payment of professional withholding tax. However, the presumption does not apply in cases of ex officio assessments.

Furthermore, if multiple similar tax errors of equivalent severity are identified during the same audit covering several tax years, they shall be treated as a single offence. The presumption of good faith may then be extended to all the errors identified. 

However, the tax authorities may rebut this presumption by demonstrating the taxpayer’s bad faith. In the absence of such evidence, the error is presumed to have been committed in good faith, unless there is a clear indication to the contrary in the case file. It should be noted that the concepts of “bad faith” and “intent to evade tax” must be distinguished and that a taxpayer may act in bad faith without necessarily having intended to evade tax.

Certain cases automatically exclude good faith: manifestly false declarations, deliberate use of inaccurate documents, deliberate concealment of income, or abusive deductions of professional expenses, in particular. 

It should be noted that this leniency only applies to the first offence. Even in the absence of a tax increase, it is recorded by the administration. In the event of a “repeat offence” within the following four tax years, a minimum increase of 20% may be applied, even if the error was committed in good faith.

This leniency is now based on a clear legal presumption, rather than administrative practice. This reform strengthens legal certainty for taxpayers acting in good faith, while introducing  a welcome degree of flexibility in an often complex area.

Key message

Until recently, the tax authorities were entitled to impose a tax increase on taxpayers, even in cases of first-time offences committed in good faith.

From 29 July 2025, most tax assessments will benefit from the absence of any increase in the event of a first offence, thanks to the presumption of good faith.