From CPC (Central Point of Contact) Reporting towards CPC2

CPC(2) Reporting towards the NBB (National Bank of Belgium)

In 2011, the National Bank of Belgium set up a Central Point of Contact (CPC), obliging Belgian banking institutions to transmit their customers’ data to the CPC. The CPC is a register containing the bank account numbers and types of contracts held in Belgium with financial institutions by natural and legal persons, both resident and non-resident. The CPC also contains the numbers and other identification data for accounts held abroad by natural persons subject to Belgian resident tax and which they declare themselves to the CPC.

Initially, the database was set up solely to simplify the tax authorities’ enquiries at banks. Since then, the number of persons entitled to consult the information and the number of reporting agents has been extended, and also the nature of the data to be communicated. In 2016, for example, it was decided that the Public Prosecutor’s Office, the anti-money laundering unit, investigating judges, police judges and even notaries could also obtain information from the CPC, but only on the basis of a specific and reasoned request.

Participants

The institutions required to communicate data to the CPC are banks, exchange, credit and savings institutions established in Belgium referred to in Article 322, §3 of the Income Tax Code 1992 (Royal Decree of 17/07/2013 — Art.1 2°).

Declarers are all financial institutions under Belgian law and branches in Belgium of foreign institutions that can rely on banking secrecy in their relations with the Belgian tax authorities, i.e. without limitation:

· credit institutions,

· payment institutions,

· brokerage firms,

· companies involved in financial leasing,

· lenders who grant consumer credit or mortgage loans.

Information provided

Each year, by 31 March at the latest, registrants shall provide information concerning the identity of their customers, as well as the numbers of their bank accounts and the types of contracts in force during the previous year. The data shall be kept for eight years. Upon expiry of the abovementioned retention period, expired data shall be irrevocably deleted. The identification data shall be:

· for natural persons: the identification number in the National Register of Natural Persons or, failing this, the surname, first name, date and place of birth (or, failing this, the country of birth);

· for legal persons: the registration number at the Crossroads Bank for Enterprises or, failing that, the full name, any legal form and the country of establishment.

The following shall also be communicated:

· the numbers of bank accounts opened in Belgium which enable the client to receive income, make cash withdrawals or payments, make payments to third parties or receive payments on behalf of third parties, and of which the client was the holder or co-holder with a declarant during the previous calendar year;

· the types of contracts outstanding with a filer at any time during the previous calendar year.

The first year for which bank account numbers were recorded is 2010. However, it is only from January 2015 onwards that the types of contracts are reported to the CPC, i.e. those in force in the year 2014. The retention period for data communicated to the CPC is 8 years from the closing date:

· as regards identification data: the last calendar year to which the identification data communicated relates;

· for other data: the last calendar year to which a closed account or a terminated contract relates.

CPC2

To improve efficiency in the fight against tax fraud, a new legal framework was introduced in July 2018. This law, known as the CPC2 law, supplemented by the Royal Decree of 7 April 2019 on the CPC, profoundly modifies the functioning of the CPC. Indeed, with CPC2, declarers are not only liable to communicate additional data concerning their customers and contracts, but also financial transactions in their declaration to the NBB. To comply with the law, declarers have to report some specified data for the following types of operation:

· Account: IBAN, client identification data, contractual relation (holder or representative), start date and end date of the relation;

· Financial contract: type (mortgage, leasing, overdraft facility, life insurance of branch 21, 23, 25 or 26, …), client identification data, start date and end date of the relation;

· Financial transaction involving cash: type (via account, via transfer, against precious metal or against cash), contractual relation (customer or representative), date of the transaction(s).

In addition, in the case of financial transactions involving cash, declarers have to regularly report the clients, the types of transactions… within 5 days after the event occurrence. The CPC thus becomes a dynamic database and no longer a static one.

Author : Sebastien