Hoofdstuk 9 Summary

The integration of fiscal data within the context of nationwide supervision takes a central place within this study.1 Sharing fiscal data can, in general, benefit the compliance to laws and regulations. Maybe even the historical motto ‘Eendracht maakt macht’ (Unity creates power) applies here: cooperation between administrative bodies can increase the strength in general. This also belongs to the so-called ‘one-counter’ idea, a Dutch concept where citizens as well as companies do not have to provide their data to individual supervisors multiple times. They provide their data once and the data is saved and available for multiple companies.

However, collaboration that is connected with provision of data, whether or not reciprocal, cannot be seen in isolation from each person’s own duties. The latter is a social responsibility that is legally determined for the administrative bodies. Citizens and companies may derive confidence from a careful performance of the tasks by the individual administrative bodies.

It can harm the performance of the tasks of the Tax Authorities when the process of sharing tax information is not considered to be fair. Several factors together, influence the righteous collection and sharing of fiscal data. Therefore, these factors create a framework wherein the integration of fiscal data within a nationwide supervision should take place (chapter two). When this framework is not created, the performance of the tasks of the individual administrative bodies will experience pressure.

A full transparency of citizens and companies is a conditio sine qua non in the taxation process. This does not only apply to their own taxations, but also to the taxations of third parties. And although there is a legally required cooperation between a citizen or company and a tax inspector, the tax inspector, being the financial confessor, can only perform his duties when he has the complete trust of the parties involved. The historical guarantees of using the data only for the purpose it is collected for and a strict prohibition on disclosure of data for other purposes (the duty of confidentially) still applies today in its entirety. These guarantees are the cornerstone of taxation. Taxation fulfills a unique task in the society. Therefore, sharing data obtained within the framework of performing the task of taxation with other supervisors does not fit within the guarantees of taxation: it may even conflict with these guarantees (chapter three).

Citizens and companies have an ongoing responsibility to cooperate with the tax inspector while he performs his tasks within the context of taxation. The system of tax obligations provides, in a specific way, the rules thereof. The supervision on the compliance with tax obligations has a different perspective than compliance with other legislation and regulations (chapter four). The latter one mainly focuses on the (national) security of the society. There is a general administrative framework with authorizations, which can be supplemented with other specific authorizations, to be able to supervise.

The comparative study (chapter five) shows that the tax liability system in the Algemene Wet inzake Rijksbelastingen (hereafter: AWR) the Dutch General law for taxation (hereafter: GLT), differs fundamentally from the authorizations laid down in the Algemene wet bestuursrecht (hereafter: Awb), the Dutch General administrative law act (hereafter: Gala). The fiscal obligations in the tax system are in such a way intertwined with the system of levying taxes that they cannot be separated. The system of granting authority to the tax inspector, as laid down in the Awb (Gala), does not meet the needs of the tax inspector. When using the authorities from the AWR (GLT), the tax inspector can make use of unique fiscal data. But, apart from the differences, there are also some agreements in both systems regarding the obligation of cooperation. When the inspector and the supervisor use their respective authorities they have access to functionally equivalent data. But although both of the parties may have access to the same data, the inspector cannot simply share the data with the other party. The Tax Authorities do have the legal right to obtain data from other administrative bodies. However, this does not apply to other administrative bodies. All administrative bodies, except the Tax Authorities, can only obtain data from other administrative bodies in specific situations when this has been laid down in a specific legislation.

All administrative bodies, including the Tax Authorities, are subject to a statutory duty of the confidential use of confidential data, unless sharing is necessary for the performance of their duties or according to a statutory obligation to provide data (Article 2:5 Awb/Gala). A general prohibition of sharing data applies to the inspector, unless there is a legal obligation (Article 67(2)(a) AWR/GLT). The Awb/Gala contains a provision for the Tax Authorities to share data by the way of an exemption, the Tax Authorities do also share some data while there is no legal obligation to do so (Article 67(2)(b) AWR/GLT in conjunction with Article 43(c) Regulation AWR/Regulation GLT and Article 67(3) AWR/GLT). But a fiscal exemption of a specific prohibition does not automatically provide for an exemption from the duty of a legal obligation, as determined in the Awb/Gala.

Tax Authorities do not disclose why there is a need for sharing data or the way they share data. Tax Authorities do not have a publicly known or transparent policy for weighing up the interests of the parties which are involved (chapter six). The involved citizens and companies do not get information about the fact that their data will be provided to other administrative bodies (based on Article 67(2)(b) AWR/

GLT in conjunction with Article 43(c) Regulation AWR/Regulation GLT and Article 67(3) AWR/GLT). Therefore it remains unknown to the involved parties whether or not the Tax Authorities will share confidential data with other administrative bodies. These involved parties can only hope that the Tax Authorities will carefully weigh the interests. Since there is no transparency on this issue, there is also no control possible. This means that there is no adequate legal protection here for the parties involved.

This leads to a literally and figuratively drastic conclusion. An intended strict requirement for the tax inspector to keep confidential information confidential exists. However, there are several possibilities to provide data and information to other administrative bodies without a duty to inform or involve the citizens and companies which are involved.

This research is based on the pressing question whether the task of the Tax Authorities, in strengthening the information position of other supervisors, can be reconciled with the statutory task of the Tax Authorities; a task that is based on the trust of citizens and companies.

The framework wherein the sharing of tax data currently takes place falls short in guaranteeing the trust citizens and companies put in the Tax Authorities. There is neither a weighing up of the interests of citizens and companies, transparency or adequate legal protection. This gives supervisors the ability to have access to data without a statutory ground. This all without the knowledge of the citizens and companies which are involved. In this way, the trust of citizens and companies in the Tax Authorities will not improve. It may even obstruct the Tax Authorities in the performance of their tasks.

Tax Authorities have a legal basis for sharing data. But the way Tax Authorities share data currently is not in accordance with the legal basis for sharing data. This does not imply that there is no possibility at all for the Tax Authorities to fulfill a role within the nationwide supervision. However, it does require a framework wherein both the weighing up of the interests of citizens and companies together with their positions are involved. So therefore I have formulated some recommendations on how to achieve this.

In order to get a righteous integration of fiscal data, I have two starting points. Namely (1) the administrative bodies which receive data do have a statutory authority to obtain the data and (2) there is transparency and legal protection while they share data. There is an involvement of citizens and companies required when their data is shared. Integration of fiscal data can take place within the context of an Algemene Verordening op Gegevensbescherming, the Dutch equivalent of a European General Data Protection Regulation. To this end, the statutory obligation to provide tax information must be extended. The provision of tax information should take place within the legal general framework of the confidential obligations from the Awb/Gala. The revocation of the exemption regulation according to the Implementation Regulation (Article 67(2)(b) in conjunction with Article 43(c) Regulation AWR/Regulation GLT) is necessary. Furthermore, the Tax Authorities should be more transparent about when and how they share data in individual cases.

There should be an unambiguous standard procedure when confidential data will be shared. There should even be a guarantee that there will be an involvement of the citizen or company whose data is about to be shared. The integration of data can take place within a proposed basic register Supervision Data (‘basisregister Toezichtgegevens’).

With respect to the technical implementation, it could be possible to seek for a connection with new technologies, such as Blockchain. When this groundbreaking technology (Distributed Ledger Technology, DLT) is implemented, citizens and companies will gain the control over their data. But in the meantime the quality of the data as well as the use thereof can be guaranteed. Blockchain gives substance to the ‘one-counter’ idea. The collection of data takes place by means of that ‘counter’ and is afterwards available for other administrative bodies, as far as necessary within the fulfilling of their duties.

A fair integration of fiscal data can be fulfilled by using blockchain. The collection and sharing of data (and intelligence) by the Tax Authorities will get a different dimension. While using blockchain, the collection of data will take place, after validation, within the network of the Tax Authorities as a legal party and within the network of the other (legally) permitted parties. This network will collect the data and within the same network data will be saved and shared by the selected supervisors.

In this way, citizens and companies keep control over their own data and it gives full transparency on how administrative bodies share the data. Another benefit is that this is not limited by national borders. Therefore this offers the possibility to share data within Europe and even beyond Europe.

This research provides the framework wherein the Tax Authorities, in a responsible and transparent manner, can share fiscal data with other supervisors. It also gives a contour sketch of the way wherein this can take place.

The Tax Authorities obtain a unique position by having a responsibility for citizens and companies. Without neglecting the importance of other legislations and regulations, it is important -in my view- to realize what the statutory task of the Tax Authorities is: levying and collecting taxes. Tax Authorities do need a broad social transparency of citizens and companies to fulfill this task. Therefore it is essential that citizens and companies trust the Tax Authorities. The data citizens and compa nies entrust to the inspector should only be for the purpose of taxation. Citizens and companies do have a benefit themselves by providing their data, as it is only possible to achieve a fair taxation system when Tax Authorities have the data they need. Citizens and companies should be able to trust the Tax Authorities and they should be able to rely on the fact that their data is not shared with other administrative authorities without their knowledge. Tax Authorities have the task not to betray the trust of citizens and companies. That requires transparency of the Tax Authorities.

However, this does not mean that the tax Authorities should always remain a closed bastion. It should be possible to share the data which citizens and companies also share with other supervisors. Within a democratic society it can be stipulated that fiscal data is not limited to taxation. And from a societal point of view there can be important interests which allow the Tax Authorities to share exclusive fiscal data with others. However, by doing so, transparency and guarantees are necessary.

With my recommendations I hope to contribute to the righteous integration of fiscal data in nationwide supervision and in the further harmonization of administrative bodies without making concessions to fiscal confidence. Tax Authorities should always keep the latter in mind, because, in the words of Abraham Lincoln: ‘If you once forfeit the confidence of your fellow citizens, you can never regain their respect and esteem. It is true that you may fool all of the people some of the time; you can even fool some of the people all of the time; but you can’t fool all of the people all of the time.’ And that affects us all.