Karel De Gucht accused of tax fraud: "Do not declare money, it's tax evasion"

Belgium

Karel De Gucht and his wife Mireille Schreurs have "consciously avoided declaring money" and "set up a construction" making them guilty of "tax evasion", argued on Wednesday the lawyer of the Belgian State before the Tax Chamber of the Ghent Court of First Instance. According to Bruno Cardoen, who defends the couple De Gucht, the fisc has engaged in a "fishing information" and the amount of nearly a million euros claimed is null and void. The tax authorities had opened an investigation on suspicion of fraud over the couple's villa in Tuscany (Italy). According to the defense of Karel De Gucht, the property was not managed personally but by an Italian company under Italian law.

In February 2010, the ISI extended the review period from three to seven years because there were indications of fraud.

The taxman had examined the couple's accounts and noticed a suspicious transaction. Mr. De Gucht realized in 2005 a profit of 1.2 million euros with the sale of his shares in a zinc company and it is for this transaction that the tax claims the sum of 900,000 euros.

"The ISI tried to obtain data that it was not allowed to have in Belgium via domestic law (by questioning the Italian tax authorities, Ed.)," Said Bruno Cardoen. These data were protected in Belgium by bank secrecy, still in force at the time. The act of inquiry is therefore obsolete. The ISI also sought to know if other Belgian citizens were involved. It was pure fishing for information, which in itself leads to the nullity of the act of inquiry and the amount. "

The capital gain on the shares was not professional income, the defense reacts. "The taxable time was also handled by the tax authorities and we demand the complete cancellation of the disputed amount."

The Belgian State's lawyer challenges the nullity. "The investigation was conducted in the rules, the bank secrecy was not violated by questioning the Italian tax authorities and it is certainly not a fishing information.It is precise indices of fraud" , did he declare. "De Gucht was able to acquire these shares only because he was manager, it was a reward for the services rendered.All the money was not declared, and this voluntarily. (..) A construction has been put in place and it is about tax evasion. "

The tax chamber will vote on January 9.

The couple is also targeted by a second tax case. It concerns more recent tax returns from Karel De Gucht and his wife, in which they deduct the losses of their Italian farm from their Belgian taxes. This case will be pleaded in April.