Procedural and Judicial protection Tax Law Department Procedural and Judicial protection Sylvie De Raedt, post-doctoral researcher, lawyer

observations and limitation of the object

observations Increased gathering of information by tax authorities, including information of whistle blowers Increased sharing of information by tax authorities with other authorities Trend of public disclosure by tax authorities? Publication of tax information by third parties (f.ex.: journalists & ngo’s)

Limits to tax transparency trends (1) Right to private life (2) Right to protection of personal data -> general legal protection for the tax payer How are there rights procedurally and judicially protected?

Right to private life: Procedural protection

Protection of the right to private liFE Article 8 ECHR: vertical effect – addresses to public authorities Distinction to be made Actions of the tax authority and legal measures forcing tax payers or third parties to disclose information Disclosure by a third party without legal obligation (journalists,…)

Protection of the right to private liFE Action of the tax authority or legal measure Whenever an action of a tax authority or a legal measure qualifies as an interference in private life (8 ECHR) -> requirements of article 8 ECHR need to be fulfilled: Condition of legality (incl. foreseeability) Condition of legitimacy Condition of necessity

Protection of the right to private liFE Action of the tax authority or legal measure Condition of foreseeability and necessity are often assessed by examining the presence of sufficient procedural safeguards against abuse Judicial review is considered as the most important procedural safeguard, because it offers the best guarantees of independence, impartiality and proper procedure (art. 6 ECHR)

Protection of the right to private liFE Action of the tax authority or legal measure Requirements for judicial review ? (a) requirements of article 6 ECHR is applicable whenever the determination of civil rights (such as the right to private life) is at stake (in spite of FERRAZZINI case law) Access to a independent and impartial tribunal established by the law Full jurisdiction (f.ex. ECtHR 21 February 2008, RAVON/Frankrijk) Fair (incl. equality of arms) and public hearing Reasonable time Public and well-reasoned judgment

Protection of the right to private liFE Action of the tax authority or legal measure (b) requirements of the case law on article 8 ECHR Moment of judicial review Quality requirements

Protection of the right to private liFE Action of the tax authority or legal measure Moment of judicial review Possibilities in practice: -> prior to the interference (f.ex. tax authorities should ask for a warrant for the search of a home, f.ex. legal measure forcing tax payer, third party or tax authority to disclose (ECtHR 6 December 2012, MICHAUD/France) -> prior to the tax assessment (f.ex. Netherlands) Condition: tax payer has to be aware of the interference Quid information gathering from third parties or other public authorities -> mostly no notification -> after the tax assessment Condition: the information gathered by interfering/violating private life is used in the tax assessment Quid violation of the right to private life leading to unused information?

Protection of the right to private liFE Action of the tax authority or legal measure -> prior judicial review is not required for even privacy invasive information gathering as long as the member state provides for effective and adequate safeguards against abuse -> if the member state provides for prior judicial review: the prior warrant should be based on reasonable suspicion and should be reasonably limited in time and object of the search (ECtHR 5 July 2012, GOLOVAN/Ukraine)

Protection of the right to private liFE Action of the tax authority or legal measure What about information gathering that qualifies as an interference in private life without the tax payer knowing? Distinction: The information is finally be used for the tax assessment: ECJ 22 October 2013, C-276/12, SABOU: no rights of the defence during investigation stage See also ECtHR 16 June 2015 OTHYMIA/Netherlands The information is NOT used for the tax assessment: shouldn’t the tax payer be informed as soon as the secrecy is no longer required?

Protection of the right to private liFE Action of the tax authority or legal measure Other quality requirements of domestic judicial review? -> needs to be effective and adequate -> assessed with all the elements of the case, f.ex. notification of the tax payer, presence of tax payer or representatives, report, tax payer received a copy of that report, duty to return irrelevant information, …

Protection of the right to private liFE Action of the tax authority or legal measure Effectiveness of judicial review: What a about admitting unlawfully acquired information? Observation: a lot of countries allow unlawfully acquired information in some way ECtHR: does not interfere in such practice of member states, even if article 8 ECHR is violated (f.ex.: ECtHR 12 July 1988 SCHENK/Switzerland) -> article 6 ECHR only involves the possibility to challenge the evidence ECJ: article 47 Charter (right to an effective judicial remedy): if a fundamental right is violated, the evidence obtained in this context must be disregarded and the decision which is founded on that evidence must be annulled if , as a result, the decision has no basis (ECJ 17 December 2015, C-419/147 WEBMINDLICENCES Kft) ! 47 Charter has a limited scope: only for member states that are implementing Union law

Protection of the right to private liFE (2) Disclosure by a third party without legal obligation -> member states have the positive obligation to guarantee the respect for private life, including respect between individuals (indirect horizontal effect) -> ECtHR has scrutinized the way domestic court protect fundamental rights in horizontal relations f.ex. ECtHR 27 June 2017, SATAKUNNAN MARKKINAPöRSSI OY SATAMEDIA OY/Finland, ECtHR 21 January 1999, FREZZOS & ROIRE/France: balancing article 10 ECHR (freedom of expression) and 8 ECHR -> in several countries courts allow individuals to invoke the right to private life in relation to other individuals

Data protection: procedural proTection

Data Protection Gathering, sharing, disclosing of personal data by EU tax authorities or EU third parties: EU-general data protection regulation (GDPR) is applicable Legal protection through: Different rights for the data subject (tax payer) Protection by the supervisory authorities Domestic courts

Data Protection Rights for the data subject (tax payer): right to access personal data + information on the processing (sources, recipients) right to rectification Protection by the supervisory authorities: Investigative powers Corrective powers: order processing in compliance with GDPR, ban processing, … Fines…

Data Protection Domestic courts GDPR guarantees the right to an effective judicial remedy against violations of GDPR Tax payer can mandate a not-for-profit body with public interest objectives and active in the field of data protection

Data Protection non-EU member states? Member states of the Council of Europe have data protection regulation based on Convention 108 principles of data protection similar to GDPR Legal protection: see domestic regulation

Dr. Sylvie De Raedt post-doctoral researcher Tax law department E Dr. Sylvie De Raedt post-doctoral researcher Tax law department E sylvie.deraedt@ugent.be T +32 9 264 68 48 www.ugent.be Universiteit Gent @ugent Ghent University