SURCHARGES AND PENALTIES ;m tax law The power to design tax pi o exchange of information, i penalties and the resprc Comparative works on the tc fill this gap, i' I sij.i'1; M.1 i.f ■ri:r.al ijAj pi v. ,1, -i p ,,.,( (J» Wfl The same applies to criminal it from a mminal .scientific proceeding is frequently i?ckir this differentiation of tax lav interface of these fields of !au. In thi interesting because the E. u-i"? _,ik~ to article 6 of the ECHE material importance of penalties or pt*i*=ln *vro£d'?s. lllf tx 1 '-l Jn.Ji-li-;;--ri;.Mn-r'hi> 'jc.cA liU'id- j-W Li in in. l.iv ma -Jrt ^i'-t-.m'-i -i'li'.mi. lo tl" u,d ih- d/iiiictin, iV a:« o f- ui Hit. t'.JlV i» 'ii rd -"isii«l M v r\>or •' \ hi"" ,''-,L' ■si-.: With 20 national i'-T i'11-1 1' Imr.i ■•! >, tVs,n i-td 'v. i-t>.l p. , i l.Hi" r.3''i t 1 tax procedures, ■■■ \m r'- ut I.-. n.^ ' . u\ „wi ir, ii.i i>u hiri' ii ta surcharges are applied and the n mi i r».-i!!iiiiHd ^ -j" i' f" "*'PJ,,s are accompanied by a gerteial'3^1 orL Mm In - ,>r.r jnc ■ um sp mill q reports depicting the structure ©£:ihi (.-l'Mill 011" (aj'ic~( '.' -iii M-Jjr ■it Contributors: Ki:ia Aguiar, Simo.u \in i _J'i m A>rj.ii i ii- A - ii. i. \i J.>ai, Michael Beusch, C'.-r n:-i. 1.j-i i- ,uii^ rd| i-n-r, ! .u "J ■ i'Mi'Vi* I Bi.Jfl, Lorenzo Del Federk-. AiKonio i.e.f-. 1 1 ' Erdos, Rita de la : l:-n I'.-in: .-ji". .u .1 jI.l.ljJ.Ht' i"uir\i<< vi Sandra Grill, Hann?. Grylin, A:ma J- Langhave Jeppesen, v«..r K. H. i- si Ii c d . U'^rnw ;i I.-uu.-ti i'.iic Lindgren, A.-.imJil V u ■■■Ld>' - M.»fi |*u|iv. I ,ttn> ./.j-.i ii< in Autorin. Marinello, GiuseV.- \ mr,, M '.' >>, Ihi-"-l M--t.l-' ' j- - Mo. .et AdamNita, Petro- ^ j ii/.1 i'-"1'- " 'h-j^ s '»-■1 -W Scalera, Marcus t'in.-i I'.-.m-St - .i>| w..f a m CO > > on 53 X i'dited by oinan Seer and Anna Lena Wilms surcha an penait: liATFP Annual Congress Milan 28 - 30 May 2015 14 EÄI1P INTliRKATIONAl. TAX SF.R1ES VOLUME 14 1bfd IBFD Table of Contents Preface About the Authors Introduction Part 1 General Report Chapter 1: General Report Roman Seer and Anna Lena Wilms 1.1. Criminal surcharges 1.1.1. Criminal procedure 1.1.2. Characterization of criminal penal ties 1.1.3. Types of criminal penalties 1.2. Administrative surcharges 1.2.1. Administrative procedure 1.2.2. Characterization of administrative surcharg 1.2.3. Types of administrative surcharges 1.2.4. Specific rules for tax shelter and schemes 1.2.5. Administrative surcharge reliefs 1.3. Regulatory offence fines 1.4. Interests 1.5. Enlargement of tax surcharges on third parties 1.6. Accumulation of surcharges 1.7. Recourse to legal protection 1.8. Summary and outlook Table of Contents Table of Contents Part 2 Thematic Reports Theme 1 Administrative Surcharges: Instruments of Cooperative Tax Compliance Regimes Chapter 2: Tax Penalties as Instruments of Cooperative Tax Compliance. Regimes Leandra hederman 31 2.1. 2.2. 2.3. Information from the national reports 32 2.1.3. Types of penalties used by the countries surveyed 32 2.1.2. Purposes of tax penalties 35 How can penalties help tax compliance efforts? 37 Conclusion 43 Chapter 3: Comment Report: Tax Penalties in a Cooperative Compliance Framework Jose A. Rozas 3.1. 3.2. 3.3. 3.4. 3.5. The fiscal environment of the 21st century The classical paradigm against the cooperative one Expressive strategies of cooperative models Tax penalties in a cooperative framework 3.4.1. Standardization of sanctions 3.4.2. Management of penalties Conclusions 45 45 48 49 53 55 57 60 Theme 2 Tax Surcharges and the Proportionality Principle ■ Accumulation and Interests Chapter 4: Administrative Tax Surcharges and the Proportionality Principle Jacques Malherbe 65 4.1. Nature of admini strative penalties 65 4.2. Administrative penalties sanctioning both intentional offences and violations of the law by negligence 65 4.3. Graduation 66 4.4. 4.5. 4.6. 4.7. 4.8. 4.9. 4.10. 4.11. 4.12. 4.13. 4.14. 4.15. 4.16. Special cases Types of administrative offence Abuse of law Ceilings and floors 4.7.1. Maximum 4.7.2. Minimum Reductions Exemptions Remission of penalties Time limit Proportionality A perfect wording EU Law Judicial application of proportionality Conclusions 67 67 69 69 69 69 69 70 70 70 71 72 72 73 75 Chapter 5: Comment Report: Penalties, Interest and Surcharges under the Perspective of Proportionality Antonio Lopez Diaz 11 5.1. 5.2. 5.3. 5.4. Introduction Proportionality and the nature of surcharges Proportionality and interest 5.3.1. Type of interest 5.3.2. Time for determination 5.3.3. Basis of application Proportionality and sanctions Chapter 6: Interests in Light of the Proportionality Principle Klaus-Dieter Driien and Phiiipp J. Butler 11 78 80 81 82 83 83 85 6.1. 6.2. 6.3. Introduction: the relevance of appropriate interests Limitation of interests - the principle of proportionality 6.2.1. Origins of the limitation of interests 6.2.2. Purpose, structure and effectiveness of the principle of proportionality Tax interest systems and the principle of proportionality 6.3.1. Applicability of the principle of proportionality upon tax interests . . 6.3.2. Purposes of tax interests 6.3.3. Proportionality of tax interests 6.3.3.1. Interest level 85 86 86 90 91 Table of Contents 6.4. 6.3.3.2. 6.3.3.3. 6.3.3.4. Conclusion 6.3.3.1.1. Reference rate 6.3.3.1.2. Dynamic link 6.3.3.1.3. Reimbursement interests: equal or split rate? Method of interest determination Computation period Computation base Chapter 7: Theme 3 Decriminalization of Tax Law by Administrative Penalties on Tax Duties Decriminalization of Tax Law by Administrative Penalties on Tax Duties Lorenzo Del Federico and Francesco Montanari 7.1. 7.2. 7.3. 7.4. 7.5. 7.6. 7.7. Introduction The purpose of (criminal) "penalties": a European principle-based overview The broad category of direct and indirect (atypical) penalties The different meanings of decriminalization Decriminalization and subjective or objective conditions Decriminalization based on cooperative taxpayer's behaviour and on agreements Conclusions Chapter 8: Comment Report; Decriminalization of Tax Law by Administrative Penalties on Tax Duties Funda Bagaran Yavaslar 8.1. 8.2. 8.3. The meaning of decriminalization 8.1.1. Two approaches to decriminalization 8.1.2. Definition of a crime 8.1.3. Purpose of decriminalization The reasons for a need of decriminalization in tax law 8.2.1. Generating tax revenue and remedying the damage 8.2.2. Additional benefits Conclusion 91 93 94 95 97 98 101 101 102 105 108 110 113 115 117 117 117 117 120 121 121 123 124 Chapter 9: Table of Contents Comment Report: Decriminalization of Tax Law by Administrative Penalties on Tax Duties Juha Lindgren Perspectives Ne bis in idem Graduated sanctions Principle of legality Conclusion Theme 4 Limitation of Administrative Penalties by the European Convention of Human Rights (ECHR) and the EU Charter of Fundamental Rights Chapter 10: Limitation of Administrative Penalties by the European Convention of Human Rights and the EU Charter of Fundamental Rights Giuseppe Marino* 125 125 126 127 128 129 Roles of ECtHR and EU Charter of Fundamental Rights in protecting taxpayers' rights Administrative and criminal tax penalties Administrative and criminal penalties: Serving different or identical puiposes? Qualification of national tax penalties as reactions to criminal offences under article 6 of the ECHR and related consequences The EU Charter of Fundamental Rights' criteria for criminal penalties Administrative penalties (I): Ne bis in idem as a general principle of international law Administrative penalties QI):Ne bis in idem in the EU Charter of Fundamental Rights Administrative penalties (III): ECtHR case law and current problems in taxpayers' rights 10.9. Administrative penalties (IV): Possible solutions to make ne bis in idem foreseeable . 10.10. Conclusions 10.1. 10.2. 10.3. 10.4. 10.5 10.6. 10.7. 10 133 133 137 141 142 147 149 150 1.52 158 161 Table of Contents Table of Contents Chapter 11: Comment Report: Limitation on Administrative Penalties by the ECHR and the EU Charter: The View from the Netherlands 163 Sigrid Hemels 11.1. Introduction 163 11.2. Far-reaching impact of ECtHR's case law 163 11.3. It's all about cars: ECHR becomes influential in tax disputes in the mid-1980s 164 11.4. Introduction of second factual court because of human rights treaties 165 11.5. Terminology: Surcharge or penalty? 166 11.6. Is interest a penalty? 166 11.7. Ne bis in idem in a computerized world 167 11.8. A hot topic in the Netherlands: Nemo tenetur and tax obligations 168 11.9. Conclusion 170 Part 3 National Reports Chapter 12: Austria 173 Tina Ehrke-Rabel, Sandra Grill and Marcus Schinnerl 12.1. Taxpayer and third-party duties 173 12.1.1. Tax assessment procedure 173 12.1.2. General duties within tax assessment procedures 174 12.1.2.1. Disclosure obligations and duty of truthfulness 1.74 12.1.2.2. Reporting requirements 174 12.1.2.3. Obligation to keep books and records 176 12.1.2.4. Obligation to file tax returns 177 12.1.2.5. Self-assessment 177 12.1.3. Duties regarding clarification, examination and supervision procedures 178 12.1.3.1. Assistance during official actions 178 12.1.3.2. Obligation to give information 178 12.1.3.3. Criminal proceedings .--'' 179 12.1.4. Duties regarding tax collection 180 12.1.4.1. Income tax 180 12.1.4.2. Value added tax 183 12.1.4.3. Local tax on wages 183 12.1.5. Duties regarding tax shelter or tax schemes 183 12.1.6. Other duties 184 12.2. Definition and categorization of different types of surcharges 184 12.2.1. Criminal penalties 184 12.2.2. Administrative tax penalties 187 12.2.2.1. Distinction between criminal penalties meeting the Engel criteri a and administrative tax penalties 187 12.2.2.2. The Ne bis in idem principle 188 12.2.3. Interests 188 12.2.4. Other surcharges 189 12.3. Catalogue of attributes of different surcharges 190 12.3.1. Purpose/aim/justification 190 12.3.2. Prerequisites 192 12.3.3. Timely appliance of the surcharge 193 12.3.4. Amount of the surcharge, base on which the surcharge is applied or the duration of imprisonment 193 12.3.5. Maximum limit regarding the surcharge amount or the imprisonment 194 12.3.6. Surcharges depending on fault or not 194 12.3.7. Exceptions from surcharges 195 12.3.8. The imposition of surcharges/penalties and who is in charge 196 12.3.9. Procedures regarding administrative and criminal tax penalties - comparison 196 12.4. Surcharges regarding third parties 198 12.5. Legal protection of the taxpayer/third parties 199 12.5.1. Legal actions in tax law/fiscal criminal law 199 12.5.2. Appeal Procedure 199 12.5.2.1. Administrative surcharges and administrative tax penalties assessed by the tax authority 199 12.5.2.2. Criminal penalties assessed by tax authorities 200 12.5.2.3. Criminal penalties assessed by a court 200 12.5.3. Interim measures regarding legal protection 201 12.5.3.1. Administrative surcharges and administrative tax penalties assessed by the tax authority 201 Table of Contents Table of Contents 12.5.3.2. Criminal penalty assessed by the tax authority 12.5.3.3. Criminal penalties assessed by a criminal court 12.5.4. Protection through advance ruling 12.5.5. Alternative dispute resolutions or settlements (dealing) 12.5.6. Legal certainty through prescription 12.5.7. Level of tax law safeguards 12.6. Deductibility of surcharges Chapter 13: Belgium Jacques Malherbe, Bart Peelers and Geoffroy Galea 13.1. 13.2. Introduction The duties of the taxpayer and third parties 13.2.1. Income tax 13.2.1.1. Tax returns and forms Tax assessment procedure Duties of taxpayers Duties of third parties Tax collection procedure 13.2.2. 13.2.1.2. 13.2.1.3. 13.2.1.4. 13.2.1.5. VAT 13.2.2.1. 13.2.2.2. 13.2.2.3. 13.2.2.4. 13.3, 13.4. 13.5. Tax returns and forms Tax assessment procedure Duties of taxpayers Duties of third parties Definition and categorization of surcharges at 13.3.1. Criminal penalties 13.3.1.1. Tax fraud 13.3.1.2. Money laundering 13.3.1.3. Forgery 13.3.2. Administrative tax penalties 13.3.3. Interest 13.3.4. Other surcharges 13.3.5. Una via Definition and categorization of surcharges at 13.4.1. Criminal/civil penalties 13.4.2. Other surcharges Legal protection of taxpayers/third parties 13.5.1. Legal procedures 13.5.3.1. Legal principles taxpayer level 202 202 202 203 204 205 205 207 207 208 208 208 209 211 213 216 218 218 220 220 222 224 227 228 229 230 ■ 231 235 238 239 third-party level 242 243 244 247 247 247 13.6. 13.5.1.2. Advance tax rulings 13.5.1.3. Procedures 13.5.1.3.1. Administrative procedure 13.5.1.3.2. Civil proceedings 13.5.1.3.3. Criminal procedure Deductibility of surcharges Chapter 14: Czech Republic Lukas Moravec and Michal Radvan 14.1. Taxpayer and third-party duties 14.1.1. Tax assessment procedures 14.1.2. General duties within the tax assessment procedures 14.1.3. Duties regarding clarification, examination and supervision procedures 14.1.4. Duties regarding tax collection 14.1.5. Duties regarding tax shelters or tax schemes 14.2. Definition and categorization of different types of surcharges 14.2.1. Criminal penalties 14.2.2. Administrative tax penalties 14.2.3. Interests 14.2.4. Other surcharges 14.3. Catalogue of attributes of different surcharges 14.3.1. Purpose/aim/justification 14.3.2. Prerequisites 14.3.3. Timely application of the surcharge 14.3.4. Amount of the surcharge, the base on which the surcharge is applied, the duration of imprisonment 14.3.5. Maximum limit regarding the surcharge amount or imprisonment 14.3.6. Surcharges and fault 14.3.7. Exemptions from surcharges 14.3.8. Imposition of surcharges and penalties 14.3.9. Procedures regarding the imposition of administrative tax penalties and criminal penalties 14.4. Surcharges regarding third parties 14.5. Legal protection of the taxpayer and third parties 14.5.1. Recourse to legal actions 14.5.2. Authorities and institutions 14.5.3. Interim measures regarding legal protection 14.5.4. Protection through advance ruling 14.5.5. Alternative dispute resolution 251 252 252 253 254 255 259 259 261 262 262 264 265 265 265 266 268 269 269 269 270 270 270 272 272 272 273 273 273 274 274 275 276 276 276 Table of Contents 14.5.6. Other tax law safeguards 276 14.6. Deductibility of surcharges 277 14.7. Numbers 277 14.8. Effectiveness 280 Chapter 15: Denmark 283 Jane Bolander and Inge Langhave Jeppesen 15.1. Taxpayer and third-party duties 283 15.1.1. Tax assessment procedures 283 15.1.2. General duties within tax assessment procedures 283 15.1.3. Duties regarding clarification, examination and supervision procedures 285 15.1.4. Duties regarding tax collection 286 15.1.5. Duties regarding tax shelters and tax schemes 287 15.1.6. Other duties 287 15.2. Definition and categorization of different types of surcharges 288 15.2.1. Criminal penalties 289 15.2.2. Administrative penalties 289 15.2.2.1. Late submission of tax assessments 290 15.2.2.2. Additional tax 290 15.2.3. Interests 290 15.2.4. Other surcharges 291 15.3. Catalogue of attributes of different surcharges 292 15.3.1. Criminal penalties 292 15.3.1.1. Imprisonment 293 15.3.1.2. Fines 293 15.3.1.3. Fines relating to transfer pricing documentation 295 15.3.2. Administrative penalties 296 15.3.3. Interests 296 15.3.4. Other surcharges 297 15.4. Surcharges regarding third parties 297 15.5. Legal protection of the taxpayer/third parties 299 15.5.1. Recourse to legal actions 299 15.5.2. Filing an objection 299 15.5.3. Interim measures regarding legal protection 300 15.5.4. Protection through advance ruling 300 15.5.5. Alternative dispute resolutions and settlements 301 15.5.6. Other tax law safeguards 301 15.6. Deductibility of surcharges 302 15.7. Effectiveness 302 Chapter 16: Finland 303 Raima Immonen and Julia Lindgren 16.1. Taxpayer and third-parry duties 303 16.1.1. Tax assessment procedures 303 16.1.2. General duties within tax assessment procedures 304 16.1.3. Duties regarding clarification, examination and supervision procedures 306 16.1.4. Duties regarding tax collection 307 16.1.5. Duties regarding tax shelters and tax schemes 308 16.2. Definition and categorization of different types of surcharges 309 16.2.1. Criminal penalties 309 16.2.2. Administrative tax penalties 310 16.2.3. Interests 316 16.2.4. Other surcharges 316 16.3. Catalogue of attributes of different surcharges 317 16.3.1. Purpose/aim/justification 317 16.3.2. Prerequisites 318 16.3.3. Timely appliance of the surcharge 318 16.3.4. Amount of the surcharge, base on which the surcharge is applied and duration of imprisonment 319 16.3.5. Maximum limit regarding the surcharge amount or the imprisonment 320 16.3.6. Fault 320 16.3.7. Exemptions from surcharges 321 16.3.8. Imposition of surcharges/penalties 321 16.3.9. Procedures regarding the imposition of administrative tax penalties and criminal penalties. 321 16.4. Surcharges regarding third parties 322 16.5. Legal protection of the taxpayer/third parties 324 16.5.1. Recourse to legal actions 324 16.5.2. Authority or institution addressed by the taxpayer/third party 324 16.5.3. Interim measures regarding legal protection 325 16.5.4. Protection through advance ruling 326 16.5.5. Alternative dispute resolutions and settlements 326 16.5.6. Other tax law safeguards 327 16.6. Deductibility of surcharges 327 16.7. Numbers 328 16.8. Effectiveness 331 Table of Contents I I Table of Contents 1.7.2. 17.3. Chapter 17: France Ludovic Ayrault and Alexandre Maitrot de la Motte 11.1. Taxpayer and third-party duties 17.1.1. Tax as sessment procedures 17.1.2. General duties within tax assessment procedures 17.1.3. Duties regarding clarification, examinati on and supervision procedures 17.1.4. Duties regarding tax collection 17.1.5. Duties regarding tax shelters or tax schemes Definition and categorization of different types of surcharges 17.2.1. Criminal penalties 17.2.2. Administrative tax penalties 17.2.3. Interests Catalogue of attributes of different surcharges 17.3.1. Administrative tax penalties imposed by the tax administration 17.3.1.1. Breach of tax return duty 17.3.1.1.1. Filing of tax declarations (or documents) in delay 17.3.1.1.2. Filing of tax return (or documents) on time but incompletely or incorrectly 17.3.1.1.3. Filing of tax return ■ (or documents) in delay and incompletely or incorrectly 17.3.1.2. Breach of duty of cooperation with the tax administration 17.3.1.3. Breach of the obligation to pay off a tax debt Breach of other duties Administrative tax penalty procedure 17.3.2. Criminal penalties 17.3.2.1. Criminal tax offences 17.3.2.1.1. Tax fraud 17.3.2.1.2. Other criminal tax offenses 17.3.2.2. Criminal tax procedure 17.4. Surcharges regarding third parties 17.5. Legal protection of the taxpayer/third parties 17.5.1. Recourse to legal actions 17.5.2. Competent authority 17.5.3. Interim measures regarding legal protection 17.3.1.4. 17.3.1.5. 333 333 333 334 335 336 337 337 337 338 339 340 340 340 340 341 341 342 342 342 343 343 344 344 345 345 346 347 347 348 349 17.6. 17.7. 17.8. 17.5.4. Advance ruling 17.5.5. Alternative dispute resolutions or settlements (dealing) 17.5.6. Other tax law safeguards Deductibility of surcharges Numbers Effectiveness Chapter 18: Germany Klaus-Dieter Drüen and Philipp J. Butler 18.1-18.2. 18.3. 18.4. .1.8.5. 18.6. 18.7. 18.8. 18.9. Introduction: The relevance of surcharges Taxpayer and third-party duties 18.2.1. Tax assessment procedures 18.2.2. Duties within tax assessment procedures 18.2.2.1. Pre-declaratory and preparatory duties 18.2.2.2. Declaratory duties 18.2.2.3. Collection duties 18.2.2.4. Examination and supervision duties Definition and categorization of different types of surcharges 18.3.1. Criminal penalties 18.3.2. Adrmnistrative tax surcharges and penalties 18.3.3. Interests . 18.3.4. Other sanctions Catalogue of attributes of different surcharges 18.4.1. Criminal penalties 18.4.2. Administrative tax penalties 18.4.2.1. General administrative tax penalty ■ 18.4.2.2. Pre-declaratory and preparatory surcharges Declaratory surcharges Payment surcharges Other adrmnistrative surcharges 18.4.3. 18.4.2.3. 18.4.2.4. 18.4.2.5. Interests Surcharges regarding third parties Legal protection of the taxpayer and third parties Deductibility of surcharges Numbers Effectiveness 350 350 351 351 353 354 355 355 355 356 357 357 359 359 359 360 361 363 366 367 369 369 372 373 374 375 377 379 379 381 383 386 387 387 Table of Contents Table of Contents Chapter 19: Greece Theodore Fortsakis and Petros Pantazopoulos 19.1. Taxpayer and third-party duties 19.1.1. Tax assessment procedures 19.1.2. General duties within tax assessment procedures 19.1.3. Duties regarding clarification, examination and supervision procedures 19.1.4. Duties regarding tax collection 19.1.5. Duties regarding tax shelter or tax schemes 19.2. Definition and categorization of different types of surcharges 19.2.1. Criminal penalties 19.2.2. Administrative tax penalties 19.2.3. Interests 19.2.4. Other surcharges 19.3. Catalogue of attributes of different surcharges 19.4. Surcharges regarding third parties 19.5. Legal protection of the taxpayer/third parties 19.6. Deductibility of surcharges 19.7. Effectiveness Chapter 20: Hungary Eva Erdos, Anna Halustyik and Ildiko Szabo 20.1. 20.2. 20.3. Introductory explanation Taxpayer and third-party duties 20.2,1. Tax assessment procedures General duties within tax assessment procedures Duties regarding clarification, examination and supervision procedures Duties regarding tax collection Some other duties Definition and categorization of different types of surcharges 20.3.1. Criminal penalties Administrative tax penalties 20.3.2.1. Delay penalty Self-audit surcharge Tax penalty Default penalty 20.2.2. 20.2.3. 20.2.4. 20.2.5. 20.3.2. 20.3.3. 20.3.4. 20.3.2.2. 20.3.2.3. 20.3.2.4. Interests Other surcharges 20.4. Catalogue of attributes of different surcharges 389 389 390 391 392 395 395 396 396 398 401 401 402 403 404 405 405 407 407 407 408 408 409 410 410 411 411 412 412 412 412 413 414 415 415 20.5. Surcharges regarding third parties 420 20.5.1. Interim measures 420 20.5.1.1. Authorization of deferred payment and payment by instalment 420 20.5.1.2. Tax abatement 422 20.5.2. Advance tax ruling 422 20.5.3. Alternative dispute resolutions or settlements 423 Chapter 21: Italy 425 Lorenzo Del Federico, Francesco Montanari, Pietro Mastellone, Antonio Marinello Silvia Giorgi, Lorenzo Trombella, Simone Ariatti and Virginia Scalera 21.1. Introduction 425 21.2. Taxpayer's and third-party duties 427 21.2.1. Taxpayer's duties 427 21.2.1.1. Tax return 427 21.2.1.2. Taxpayer's duties during tax assessment procedures 428 21.2.1.2.1. Tax assessment methods: analytical, analytical-presumptive, synthetic 429 21.2.1.2.2. Object of the tax assessment procedures 432 21.2.1.3. Duty to provide clarifications and answers to specific questionnaires 433 21.2.1.4. Accounting duties 433 21.2.1.5. Duties regarding clarification, examination and supervision procedures 435 21.2.1.6. Duties regarding tax collection 436 21.2.1.7. Duties regarding special tax disciplines 437 23.2.2. Third-party duties 438 21.2.2.1. Financial intermediaries'duties 439 21.2.2.2. .Withholding agents'duties 439 21.3. Definition and categorization of different types of surcharges 440 21.3.1. Remarks on the constitutional principles underpinning the Italian tax system 440 21.3.2. Criminal penalties 441 21.3.3. Administrative tax penalties 442 21.3.4. Default interests 445 21.3.5. Other surcharges 447 21.4. Catalogue of attributes of different surcharges 449 Table of Contents Table of Contents 21.4.1. Purpose and justification 21.4.2. Prerequisites and exemptions 21.4.3. Procedures 21.4.4. Amount of the penalty 21.5. Surcharges regarding third parties 21.6. Legal protection of the taxpayer and third parties 21.6.1. Legal remedies available and competent authorities 21.6.1.1. Legal remedies against criminal tax penalties 21.6.1.2. Legal remedies against administrative tax penalties 21.6.2. Interim measures 21.6.3. Advance ruling and requirement for its application 21.6.4. Alternative dispute resolutions (ADRs) and settlements applicable to surcharges 21.6.4.1. Agreement on the notice of assessment 21.6.4.2. Mediation for "small" tax controversies 21.6.4.3. Conciliation before the Tax Court 21.6.5. Final remarks on the general level of taxpayer's rights protection 21.7. Abuse of tax law and penalties 21.8. Deductibility of penalties 21.9. Statistical data 21.9.1. Tax evasion related to sentenced taxpayers 21.9.2. Tax revenue from tax assessment 21.9.3. Tax revenue from interests and penalties 21.10. Effectiveness 21.11. Conclusion Chapter 22: The Netherlands J.Arnaud Booij, Sigrid Hemels and Charlotte Bikkers 22.1. Introductory explanation 22.2. Taxpayer and third-party duties 22.2.1. Tax assessment procedures 22.2.2. General duties within tax assessment procedures 22.2.3. Duties regarding clarification, examination and supervision procedures 22.2.3.1. Administrative procedure 22.2.3.2. Criminal procedure 22.2.4. Duties regarding tax collection 22.2.5. Duties regarding tax shelter or tax schemes 449 449 454 456 458 466 466 467 467 469 470 471 472 472 473 473 474 476 478 478 479 479 479 481 483 483 484 484 484 487 487 488 490 493 22.2.6. Other duties 22:3. Definition and categorization of different types of surcharges 22.3.1. Criminal penalties 22.3.2. Administrative tax penalties 22.3.3. Interests 22.3.4. Other surcharges 22.4. Surcharges regarding third parties 22.5. Legal protection of the taxpayer/third parties 22.5.1. Recourse to legal actions 22.5.2. Authority or institution addressed 22.5.3. Interim measures 22.5.4. Protection through advance ruling 22.5.5. Alternative dispute resolutions or settlements (dealing) 22.5.6. Other tax law safeguards 22.6. Deductibility of surcharges 22.7. Numbers 22.8. Effectiveness Chapter 23: Norway Benn Folkvord 23.1. 23.1.2. 23.1.3. 23.1.4. 23.2. Taxpayer and third-party duties 23.1.1. Tax assessment procedures General duties within tax assessment procedures Duties regarding clarification, examination and supervision procedures Duties regarding tax collection 23.1.4.1. General points 23.1.4.2. Specific points on wage earners/wage payments 23.1.4.3. Specific points on business operators etc. Duties regarding tax shelters or tax schemes Other duties Definition and categorization of different types of surcharges 23.2.1. Criminal penalties Administrative tax penalties Interests Interest on insufficient withholding tax and interest earnings on tax paid in excess Interest in connection with changes, to the tax assessment 23.1.5. 23.1.6 23.2.2. 23.2.3. 23.2.3.1. 23.2.3.2, 493 493 493 495 495 495 496 497 497 498 498 498 499 499 499 500 500 501 501 501 501 502 503 503 504 505 505 506 507 508 509 510 510 510 Table of Contents Table of Contents 23.2.3.3. Interest on arrears 23.2.4. Other surcharges 23.2.4.1. The legality requirement 23.2.4.2. Discretionary tax assessment 22.2.4.3. Refusal of non-documented tax allowances 23.2.4.4. Abatement 23.2.4.5. Debt settlement 23.3. Catalogue of attributes of different surcharges 23.3.3. Purpose/aim/justification 23.3.2. Prerequisites 23.3.3. Timely application of the surcharge 23.3.4. Amount of the surcharge, base on which the surcharge is applied or duration of imprisonment 23.3.5. Maximum limit regarding surcharge amount or imprisonment 23.3.6. Dependence on fault 23.3.7. Exemptions from surcharges 23.3. S. Imposition of surcharges and penalties 23.3.9. Procedures regarding the imposition of administrative tax penalties and criminal penalties 23.4. Surcharges regarding third parties 23.5. Legal protection of the taxpayer/third parties 23.5.1. Recourse to legal actions 23.5.2. Authority or institution addressed 23.5.3. Interim measures 23.5.4. Protection through advance ruling 23.5.5. Alternative dispute resolutions or settlements (dealing) 23.5.6. Other tax law safeguards 23.6. Deductibility of surcharges 23.7. Numbers 23.8. Effectiveness Chapter 24: Poland Adam Nita andAndrzej Swiatfowski 24.1. Taxpayer and third-party duties 24.1.1. Tax assessment procedures 24.1.2. General duties within tax assessment procedures 24.1.3. Duties regarding clarification, examination and supervision procedures 511 511 511 512 513 513 513 514 514 514 514 514 515 515 515 515 515 516 516 516 516 517 517 517 517 517 518 519 521 521 521 522 522 24.1.4. Other duties 24 2. Definition and categorization of different types of surcharges 24.2.1. Criminal penalties 24.2.2. Administrative tax penalties 24.2.3. Interests 24.2.4. Other surcharges 24.3. Catalogue of attributes of different surcharges 24.3.1. Purpose/aim/justification 24.3.2. Prerequisites 24.3.3. Timely appliance of the surcharge 24.3.4. Amount of the surcharge, base on which the surcharge is applied or duration of imprisonment 24.3.4.1. Maximum limit regarding the surcharge amount or imprisonment 24.3.4.2. Degree of personal responsibility (dependence on fault) 24.3.5. Exemptions from surcharges 24.3.6. Imposition of surcharges/penalties 24.3.7. Procedures regarding the imposition of administrative tax penalties and criminal penalties 24.4. Surcharges regarding third parties 24.5. Legal protection of the taxpayer/third parties 24.5.1. General principles 24.5.2. Recourse of the taxpayer/third party to legal actions 24.5.3. Interim measures regarding legal protection 24.5.4. Protection through advance ruling 24.5.5. Alternative dispute resolutions or settlements (dealing) 24.5.6. Other tax law safeguards 24.6. Deductibility of surcharges 24.7. Numbers 24.8. Effectiveness Chapter 25: Portugal NinaAguiar 25.1. Taxpayer and third-party duties . 25.1.1. Tax assessment procedures 25.1.2. General duties within tax assessment procedures 25.1.2.1. Bookkeeping duties 25.1.2.2. Disclosure duties 25.1.2.3. Filing duties 524 525 525 526 531 533 534 534 534 536 537 537 538 538 539 539 540 540 540 542 543 543 544 544 545 546 547 549 549 549 550 550 551 552 Table of Contents Table of Contents 25.1.3. Duties regarding clarification, examination and supervision procedures 552 25.1.3.1. Retrospective tax audits 552 25.1.3.2. Other audit procedures 554 25.1.3.3. Duties regarding general tax supervision 554 25.1.3.4. Duties regarding the investigation of tax crimes and tax offences 555 25.1.4. Duties regarding tax collection 557 25.1.5. Duties regarding tax shelter or tax schemes 558 25.1.6. Other duties 558 25.2. Definition and categorization of different types of surcharges 559 25.2.1. Criminal penalties 559 25.2.2. Administrative penalties 560 25.2.3. Interests 562 25.2.4. Other surcharges 562 25.3. Catalogue of attributes of different surcharges 563 25.3.1. Justification 563 25.3.2. Prerequisites 563 25.3.3. Timely appliance of the surcharge 564 25.3.4. Amount of the surcharge and duration of imprisonment 564 25.3.5. Maximum limit regarding the surcharge amount or the imprisonment 566 25.3.6. Modes of culpability 566 25.3.7. Exemptions from surcharges 567 25.3.8. Responsibility for the imposition of surcharges and penalties 567 25.3.9. Procedures for the imposition of administrative and criminal tax penalties 568 25.4. Surcharges regarding third parties 568 25.5. Legal protection of the taxpayer and third parties 570 25.5.1. Recourse to legal actions 570 25.5.2. Authorities or institutions to be addressed by taxpayers or third parties in case of an objection 571 25.5.3. Interim measures regarding legal protection 571 25.5.4. Advance rulings 571 25.5.5. Alternative dispute resolutions regarding surcharges 572 25.5.6. Overall view on taxpayers' guarantees provided for in Portuguese law 572 25.5.6.1. Systematization 572 25.5.6.2. Constitutional principles of greater practical importance 573 25.5.6.3. Taxpayers' rights 25.5.6.4. Tax administration's obligations 25.5.6.5. Other guarantees 25.6. Deductibility of surcharges 25.7- Numbers of proceedings 25.8. Effectiveness of sanctions Chapter 26: Spain Antonio Lopez Diaz 574 576 576 578 578 579 581 Introduction 581 26.1. Taxpayer and third-party duties 582 26.1.1. Tax assessment procedures 584 26.1.2. General duties within tax assessment procedures 585 26.1.3. Duties regarding clarification, examination and supervision procedures 587 26.1.4. Duties regarding tax collection 588 26.2. Definition and categorization of different types of surcharges 590 26.2.1. Criminal penalties. 590 26.2.2. Administrative tax penalties 591 26.2.3. Interest 594 26.2.4. Other surcharges 595 26.3. Catalogue of attributes of different surcharges 597 26.3.1. Purpose, aim and justification 597 26.3.2. Prerequisites 598 26.3.3. Timely application of the surcharge 598 26.3.4. Amount of the surcharge 599 26.3.5. Maximum limits 600 26.3.6. Dependency on fault 600 26.3.7. Exemptions from surcharges 601 26.3.8. Who imposes surcharges/penalties 602 26.3.9. Procedures regarding the imposition of administrative and criminal penalties 602 26.4. Surcharges regarding third parties 603 26.5. Legal protection of the taxpayer or third parties 603 26.5.1. Recourse to legal actions 603 26.5.2. Which authority or institution has to be addressed by the taxpayer/third party if he wants to file an objection 603 26.5.3. Interim measures regarding legal protection 603 26.5.4. Protection through advance ruling 605 26.5.5. Alternative dispute resolutions regarding surcharges 605 Table of Contents Table of Contents 26.5.6. Other tax law safeguards 607 26.6. Deductibility of surcharges 607 26.7. Development of penalties and surcharges 607 26.8. Effectiveness 609 Chapter 27: Sweden 611 Raima Grylin andBorje Leidhammar 27.1. Introduction 611 27.2. Taxpayer and third-party duties 611 27.2.1. Tax as sessment procedures 614 27.2.2. General duties within tax assessment procedures 614 27.2.3. Duties regarding clarification, examination and supervision procedures 615 27.2.4. Duties regarding tax collection 617 27.2.5. Duties regarding tax shelters or tax schemes 617 27.3. Definition and categorization of different types of surcharges 617 27.3.1. Criminal penalties 617 27.3.1.1. Tax offences 618 27.3.1.2. Tax surcharge 618 27.3.1.3. The criminal nature of the tax surcharge 618 27.3.1.4. The extent of ne bis in idem 619 27.3.2. Administrative tax penalties 620 27.3.3. Interest 622 27.3.4. Other surcharges 625 27.4. Catalogue of attributes of different surcharges 626 27.4.1. Tax surcharge 626 27.4.1.1. Purpose/aim/justification 626 27.4.1.2. Timely application of the tax surcharge 626 27.4.1.3. Amount of the tax surcharge 627 27.4.1.4. Maximum limit regarding the tax surcharge 627 27.4.1.5. Is the tax surcharge dependent on fault? 627 27.4.1.6. Exemption 627 27.4.1.7. Who imposes tax surcharges? 628 27.4.1.8. What are the procedures regarding the imposition of tax surcharges? 628 27.4.2. Request to provide information 628 27.4.2.1. Purpose/aim/justification 628 27.4.2.2. Prerequisites 629 27.4.2.3. Timely application of a surcharge 629 27.4.2.4. Amount of the surcharge 630 IP \ w IK I" ft i i 27.4.2.5. Further information 27.4.3. Request with a fine 27.4.4. Fee in case of delay 27.4.5. Control charges 27-5- Surcharges regarding third parties 27.6. Legal protection of the taxpayer/third parties 27.6.1. Principles/legal actions 27.6.2. Authority or institution the taxpayer/third party must address if filing an objection 27.6.3. Interim measures regarding legal protection 27.6.4. Protection through advance rulings 27.6.5. Dispute resolution settlements regarding surchaq; 27.6.6. Tax law safeguards 27.7. Numbers 27.8. Effectiveness 27.8.1. Tax surcharge 27.8.2. Request 27.8.3. Request combined with a fine 27.8.4. Control charge 27.8.5. Third .parties 27.8.6. Delay charge Chapter 28: Switzerland Michael Beusch Preliminary remarks General setting 28.1. Taxpayer duties and third-party duties 28.2. Definition and categorization of different types of surchar^ 28.2.1. Criminal penalties 28.2.2. Civil penalties 28.2.3. Interests 28.2.4. Other surcharges 28.3. Catalogue of attributes of different surcharges 28.4. Surcharges regarding third parties 28.5. Legal protection of taxpayers and third parties 28.6. Deductibility of surcharges 28.7. Numbers 28.8. Effectiveness 630 630 630 631 632 633 633 633 634 636 es 636 636 637 637 637 638 638 638 638 639 641 641 641 644 es 646 646 648 648 649 649 650 651 652 653 653 Table of Contents Table of Contents Chapter 29: Turkey Funda Baiiaran Yavcqlar 655 Chapter 30: United Kingdom Rita de la Feria and Par'mtira Tanawong 703 29.1. Taxpayer and third-party duties 655 29.1.1. Tax assessment procedures 655 29.1.2. General duties within tax assessment procedures 658 29.1.2.1. Determining tax-base duties 658 29.1.2.2. Duties of keeping and submitting books and documents 662 29.1.2.3. Duty to submit a declaration 663 29.1.3. Duties with regard to clarification, examination and supervision procedures 664 29.1.4. Duties regarding tax collection 665 29.1.5. Other duties 666 29.2. Definition and categorization of different types of surcharges 669 29.2.1. Criminal penalties 669 29.2.2. Administrative tax penalties 672 29.2.3. Interest 674 29.2.4. Other surcharges 676 29.3. Catalogue of attributes of different surcharges 678 29.3.1. Purpose/justification 678 29.3.2. Prerequisites 679 29.3.3. Timely application of a surcharge 679 29.3.4. Amount of the surcharge/duration of imprisonment and maximum limits 680 29.3.5. Fault 684 29.3.6. Mitigation of penalties 685 29.3.7. Authority that imposes surcharges/penalties 686 29.3.8. Procedures regarding the imposition of administrative and criminal tax penalties 687 29.4. Surcharges regarding third parties 690 29.5. Legal protection of taxpayers/third parties 692 29.5.1. Recourse to legal action 692 29.5.2. Authorities or institutions responsible for objection-based reviews 694 29.5.3. Interim measures regarding legal protection 695 29.5.4. Protection through an advance tax ruling 696 29.5.5. Alternative dispute resolutions regarding surcharges 697 29.5.6. Other tax law safeguards 699 29.6. Deductibility of surcharges 699 29.7. Numbers 700 29.8. Effectiveness 701 ■iA 30.1- Taxpayer and third-party duties 30.1.1. Tax Assessment Procedures and General Duties 30.1.1.1. Personal Income Tax 30.1.1.2. Corporation (income) tax 30.1.1.3. Value added tax 30.1.2. Duties regarding clarification, examination and supervision Procedures 30.1.2.1. Personal income tax 30.1.2.2. Corporation (income) tax 30.1.2.3. VAT 30.1.3. Duties regarding tax collection 30.1.3.1. Personal income tax 30.1.3.2. Corporation (income) tax 30.1.3.3. VAT 704 704 704 706 707 707 708 708 709 709 709 710 710 30.1.4. Duties regarding disclosure of tax avoidance schemes 710 30.1.4.1. Income taxes 711 30.1.4.2. VAT 712 30.2. Definition and categorization of different types of surcharges 712 30.2.1. Criminal penalties 713 30.2.1.1. Income taxes 713 30.2.1.2. VAT 713 30.2.2. Administrative tax penalties 714 30.2.2.1. Penalties for errors 715 30.2.2.2. Penalties for failure to notify 717 30.2.2.3. Penalties for failure to submit returns and make payments on time 719 30.2.2.4. Record-keeping penalties 721 30.2.2.5. Avoidance and aggressive tax planning penalties 721 30.2.3. Interest 723 30.2.3.1. Personal income tax 723 30.2.3.2. Corporation (income) tax 723 30.2.3.3. VAT 723 30.2.4. Comparison of procedures applied to administrative tax penalties and criminal penalties 724 30.3. Surcharges regarding third parties 724 30.3.1. Supply of false information or withholding information 724 30.3.2. Promotion of tax avoidance and facilitation of tax evasion 725 Table of Contents Table of Contents 30.4. Legal protection of the taxpayer/third parties 726 30.4.1. Recourse to legal action 726 30.4.2. An authority or institution has to be addressed by the taxpayer/third party if they want to file an objection 727 30.4.3. Interim measures regarding legal protection 728 30.4.4. Advance ruling in the United Kingdom 729 30.4.5. Alternative dispute resolutions 729 30.4.6. Tax law safeguard 729 30.5. Deductibility of surcharges 731 30.6. Numbers and proceedings regarding surcharges 731 30.7. Effectiveness 733 Chapter 31: United States 739 Stephen W. Mazza, Leandra Lederman and Steve R. Johnson 31.1. Taxpayer and third-party duties 739 31.1.1. Tax assessment procedures 739 31.1.2. General duties within tax assessment procedures 741 31.1.3. Duties regarding clarification, examination and supervision procedures 742 31.1.4. Duties regarding tax collection 744 31.1.5. Duties regarding tax shelter or tax schemes 746 31.2. Definition and categorization of various types of surcharges 747 31.2.1. Criminal penalties 747 31.2.1.1. Code sections of general applicability directed at taxpayers 747 31.2.1.2. Code sections of general applicability directed at third parties 749 31.2.1.3. Code sections of specific, limited applicability 750 USC sections charged in the tax context 751 Categorization 753 31.2.2. Administrative tax penalties 753 31.2.2.1. Penalties for taxpayer untimeliness 753 31.2.2.2. Penalties for taxpayer inaccuracy 754 31.2.2.3. Penalties to promote regulatory goals 754 31.2.2.4. Penalties on advisers and others 754 31.2.2.5. Penalties as to required information 755 31.2.2.6. Categorization 755 Interest 756 31.2.1.4. 31.2.1.5. ■ ■Mr ■k¥: 4., ■1 31.3.2. 31.3.3. 31.3.4. 31.3.5. 31.3.6. 31.2.3. 31.2.4. Other surcharges 756 31.3. Catalogue of attributes of different surcharges 758 31.3.1. Purposes 758 31.3.1.1. Criminal penalties 758 31.3.1.2. Administrative tax penalties 759 31.3.1.3. Interest 759 31.3.1.4. Other surcharges 760 Prerequisites 761 Timely application of surcharges 761 Amounts of surcharges 761 31.3.4.1. Criminal penalties 761 31.3.4.2. Civil penalties 762 Maximum punishment 762 Surcharge dependent on fault 763 31.3.6.1. Criminal penalties 763 31.3.6.2. Civil penalties 763 31.3.6.3. Interest 764 31.3.6.4. Other surcharges 764 31.3.7. Exemptions 764 31.3.8. Authorities who determine the sanctions 766 31.3.9. Procedures for imposition of penalties 766 31.3.9.1. Criminal penalties 766 31.3.9.2. Administrative tax penalties 767 31.4. Surcharges regarding third parties 768 31.4.1. Tax return preparer penalties 768 31.4.2. Tax-shelter adviser and promoter penalties 771 31.4.3. Information reporting penalties 772 31.5. Legal protection of the taxpayer and third parties 773 31.5.1. Legal actions 773 31.5.2. Institutions to which taxpayers and third parties address objections 773 31.5.3. Interim legal protections 776 31.5.4. Advance rulings 777 31.5.5. Alternative dispute resolution and settlement 779 31.5.6. Taxpayer bills of rights and other safeguards 782 31.6. Deductibility of surcharges 784 31.7. Numbers 785 31.7.1. Civil penalties 785 31.7.2. Criminal Penalties 785 31.7.3. Interest 790 31.7.4. Settlements 790 31.8. Effectiveness 791 Introduction Roman Seer The power to design tax procedure law still rests with the national states. Apart from an exchange of information, it is not harmonized within the EU. Therefore, tax surcharges, penalties and the respective procedures vary widely between different states. Comparative works on the topic of surcharges are practically absent. This project aims to fill this gap. The same applies to criminal tax law. Usually, only criminal lawyers are dealing with it from a criminal scientific and procedural point of view. A synopsis with the tax proceeding is frequently lacking. The holistic approach of this book intends to overcome this differentiation of tax law and criminal law and pay particular attention to the interface of these fields of law. In tills regard, the application of article 6 of the ECHR is interesting because the ECtHR goes beyond just measuring penal sanctions with respect to article 6 of the ECHR and applies this to administrative sanctions if these have the material importance of penalties or penalty surrogates. What was missing therefore was an extensive legal comparison of the national tax procedures, as well as of the criminal tax laws regarding which kinds of tax surcharges are applied and the relationship with criminal tax sanctions. We chose to call the general topic "tax surcharges" rather than "tax penalties" in order to not narrow the scope too much. This allows the national reporters to also include instruments that they possibly would not consider as "penalties" in a technical sense within their reports. Thanks to this, we also gained an interesting overview of the interest payments of tax' and reimbursement claims within the several surveyed countries.