In a judgment of 18 June 2026 the Constitutional Court makes a number of important changes to the rules introduced by the Programme Act of 18 July 2025 governing tax increases for a first good-faith contravention. The Court confirms that the new rules, under which a 10% tax increase is waived for a first contravention in good faith, constitute a relaxation of the criminal law. On the basis of the principle that such relaxation applies retroactively, the Court holds that the waiver of the tax increase applies not only to assessments issued on or after 29 July 2025, but also to assessments issued before that date. This gives taxpayers another opportunity to challenge tax increases imposed in the past.
A short recap: the legislative amendment and its first application in case law
The Programme Act of 18 July 2025 introduced an important clarification of article 444 ITC92 (Income Tax Code 1992). Whereas the old text provided that, in the absence of bad faith, the minimum 10% tax increase "can be waived", the new text provides that a tax increase is waived in the case of a first contravention committed in good faith. Moreover, that good faith is presumed to exist unless proved otherwise. That presumption does not apply in certain specific cases where the tax authorities can impose an ex officio assessment on the basis of article 351 ITC92, including where a return is filed late.
However, the legislator linked the entry into force of these new rules to the date of the tax assessment. Only assessments issued on or after 29 July 2025, the date of publication of the Programme Act in the Belgian State Gazette, fell under the new regime. That temporal limitation immediately raised the question whether taxpayers could likewise rely on the more favourable rules for assessments issued before 29 July 2025 that could still be contested. After all, the new rules would constitute a relaxation of the criminal law that must in principle be applied retroactively.
In two judgements of 18 November 2025, the Ghent Court of Appeal had already confirmed this position. The Court confirmed that a 10% tax increase constitutes a criminal penalty within the meaning of article 6 of the European Convention on Human Rights (ECHR). The new legal text therefore constitutes a relaxation of the criminal law that must be applied retroactively, regardless of the national transitional provision (see our previous contribution). In the meantime, the Antwerp Court of Appeal also aligned itself with that position in a judgment of 3 March 2026. At the same time, an annulment appeal was filed with the Constitutional Court against the entry-into-force provision. The Court has now ruled on that appeal in its judgment of 18 June 2026.
The Constitutional Court confirms the retroactive effect
The annulment appeal was directed against articles 38 and 39 of the Programme Act of 18 July 2025, and thus against the regime as a whole. The applicant put forward three pleas , each alleging an infringement of the principle of equality and non-discrimination under articles 10 and 11 of the Constitution.
In the first plea, he argued that the legislator erred in limiting the presumption of good faith on a first contravention to income taxes and not extending to other federal taxes, such as VAT. The Court rejected that plea. According to the Court, the legislator could reasonably introduce that limitation, given its broad discretionary power in tax matters and the distinctive nature of the penalty regime for income taxes. This raises serious questions from the perspective of the EU-law principles of proportionality and equivalence, since the VAT rules have been harmonised. However, this goes beyond the scope of this contribution.
The second plea challenged the exclusion of the presumption of good faith on an ex officio assessment on the basis of article 351 ITC92. The Court also rejected this plea, but its reasoning is nonetheless relevant. The Court expressly underlines that the word "can" in article 351 ITC92 means that the tax authorities are not obliged to issue an ex officio assessment. An ordinary assessment always remains possible. That finding is consistent with the position we already took in our previous contribution. Article 351 ITC92 does not oblige the authorities to issue an ex officio assessment but merely gives them the option to do so. Where the tax authorities choose to issue an ordinary assessment (and thus do not resort to the ex officio assessment procedure), the presumption of good faith continues to apply in full, even if the taxpayer is in one of the situations listed in article 351 ITC92. The Constitutional Court now expressly confirms that reading of article 351 ITC92. In making that choice, the tax authorities must comply with the principles of good administration (including the principle of proportionality). Going forward, one may expect the tax authorities to give reasons for opting for an ex officio assessment.
The key issue in this judgement is the third plea, which concerns the application in time of the new rules. The applicant sought annulment of article 39 of the Programme Act on the ground that it infringed articles 10 and 11 of the Constitution, read in conjunction with article 7 ECHR. The applicant argued that the tax increase under article 444 ITC92 is a criminal penalty within the meaning of article 7 ECHR. Accordingly, the applicant submitted that relaxation of the criminal law must apply retroactively. This means that the obligation to waive the tax increase, together with the associated presumption of good faith, must also apply to all assessments that have not yet become final, including assessments issued before 29 July 2025.
The Court follows the applicant's position. First, the Court confirms, with reference to its earlier case law, that the tax increase under article 444 ITC92 is predominantly repressive in nature and therefore constitutes a criminal penalty. Both the Constitutional Court and the Court of Cassation regard the retroactive application of a relaxation of the criminal law as a general principle of law. The European Court of Human Rights has held likewise that article 7 ECHR guarantees not only the principle that stricter criminal laws may not be applied retroactively, but also, implicitly, that a relaxation of the criminal law applies retroactively.
Most importantly, the Court confirms that article 38 of the Programme Act constitutes a relaxation of the criminal law. The legislator has, after all, relaxed the previous regime in two ways: waiving the tax increase for a first contravention in good faith is now mandatory rather than optional, and a rebuttable presumption of good faith applies, increasing the burden of proof on the tax authorities. On that basis, the Court concludes that limiting the temporal scope of the rules to assessments issued on or after 29 July 2025 cannot reasonably be justified.
The Court therefore annuls article 39 of the Programme Act in so far as that provision does not cover assessments that are not yet final and may still be reviewed by an administrative or judicial body.
Practical conclusion
The significance of this judgment can hardly be overstated. The Constitutional Court has now definitively confirmed what earlier case law, including the judgments of the Ghent and Antwerp Courts of Appeal, had already held: taxpayers who have committed a first contravention in good faith can challenge the 10% tax increase for all assessments that are not yet final. The question remains, however, what exactly the Court means by "being final", since the decision appears to temper the fundamental retroactive effect of annulment judgments. After all, where a law is annulled, a new six-month period opens during which even a judicial decision that has become final and conclusive may be revoked, or a new administrative or judicial appeal may be brought against an assessment based on the annulled law.
For taxpayers currently contesting an assessment that carries a 10% tax increase, particularly an assessment issued on or after 29 July 2025, this judgment provides an additional argument for seeking annulment of the tax increase. For assessments against which no tax protest has yet been filed, but for which the period for filing a tax protest has not yet expired, taxpayers should nevertheless file a tax protest in due time, relying on the judgment of the Constitutional Court and article 38 of the Programme Act, which was not annulled. The same applies where an appeal against an assessment may still validly be brought before the court within three months of a negative decision on a tax protest. The position also remains unclear for assessments issued before 29 July 2025 for which, when the Constitutional Court ruled on 18 June 2026, the five-year period for seeking ex officio relief had not yet expired. In practical terms, this could mean that tax increases imposed by assessments issued from 2022 onwards remain contestable, provided that no final decision has been made in respect of them or, if one has been made, that a legal remedy can still be brought in due time. This may apply both to assessments following a tax return (from tax year 2021 onwards) and to assessments arising from tax audits. The possibility of ex officio relief nonetheless remains uncertain, because it is unclear whether the procedure may be used solely to contest tax increases. Companies for which the tax increase also affected the taxable result (for example, because of the disallowance of deductions applied to tax assets and the prohibition on offsetting losses under article 206/3, §1, second paragraph ITC92), may certainly invoke the ex officio relief procedure, in our view.
Finally, one may ask whether the relevant assessment date should be the date of entry into force of the partially annulled law (29 July 2025) rather than the date of the Constitutional Court's ruling. In that case, assessments that were not yet final on 29 July 2025, but for which the period for filing a tax protest or seeking ex officio relief has since expired, would still fall within the judgment’s temporal scope. They could then still be contested within six months of its publication in the Belgian State Gazette.
Our team would be glad to assist you in assessing the impact of this judgment on your specific situation and, where appropriate, in contesting an assessment on that basis.
