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Information decisions

 

The General State Taxes Act (Section 47 et seq.) gives the tax authorities wide-ranging powers to demand information and to inspect documents and other records. These powers can be enforced by law (and a civil law penalty is payable if you fail to comply). Not complying with a statutory duty to provide information can have far-reaching consequences. These can include the burden of proof being reversed or made more onerous (Sections 27e and 52a, General State Taxes Act) or a criminal investigation.

 

Until 2011, tax courts were not allowed to question the lawfulness of a request by the tax authorities for information. That meant it was also impossible to object to such a request. Since mid-2011, however, and the introduction of the information decision, it has been possible to file notice of objection.

 

As a result, you can refuse to comply with a request for information if you believe that the request goes too far. If the tax authorities want to respond to your refusal by reversing the burden of proof, they will first have to issue an information decision. Once such a decision has been issued, you can ask a tax court to examine the request for information. In this way, the lawfulness and scope of a request for information can be examined before any tax assessment is issued.

 

The information decision procedure is a separate procedure and may also be part of a wider-ranging or more extensive tax audit or other procedure. Responding to an information decision demands a specialised approach, and this is where our experience counts.

 

Note that as well as an information decision, the tax authorities can use civil law (interlocutory) proceedings to require you to disclose information. We also have extensive expertise in handling these types of proceedings.

 

You may be interested to read the FED brochure on the information decision (in Dutch) written by Hertoghs attorney Roel Kerckhoffs and our former colleague Gabriëlla Ulrich. This explains all the ins and outs of this relatively new phenomenon. The FED brochures provide a comprehensive and stimulating source of information on tax law practice. They do not provide customised information on your specific case. But that is obviously what you contact our team for.