A woman did not submit an income tax return for 2011. In 2015, the tax inspector imposed a late filing penalty of €984, 20% of the statutory maximum. Although the penalty policy has stipulated a maximum of 7% since 2014, the transitional provisions state that this rule only applies from the 2014 tax year onwards. The Supreme Court sets aside these transitional provisions on the grounds that they conflict with the principle of legality. The fine is reduced to €344.
No declaration has been made
The inspector invites the woman to file her tax return, reminds her and urges her to do so. The inspector sets the deadline for filing the income tax return as 7 May 2014. However, no tax return is submitted. On 10 January 2015, the inspector issues an assessment ex officio, including a late filing penalty. As this is the second consecutive failure to file, he imposes a fine of 20% of the statutory maximum (€4,920 at the time), in accordance with the 2011 Tax and Customs Administration Administrative Fines Decree (BBBB).
Twenty or seven per cent?
The woman points out that the maximum fine may only amount to 7% of €4,920 (€344). After all, the 2014 BBBB repealed the rule under which a default fine of 20% of the maximum is imposed in the event of a second consecutive failure to comply. The Supreme Court considers that the principle of legality and the principle of the more favourable provision (under European treaties) imply that the fine may not exceed what was possible at the time of the offence, or what has subsequently become more favourable. The transitional provision, which declares the new scheme to apply only from the 2014 tax year onwards, must be set aside as it conflicts with these treaty provisions.
The 2014 maximum applies
Similarly, the increase in the statutory maximum to €5,278 with effect from 1 January 2015 does not apply, as the offence in question occurred prior to that date and the more favourable amount applies. The Supreme Court reduced the fine to €344 and did not reduce it further, in view of the taxpayer’s financial circumstances. After all, the Court of Appeal had already deemed a fine of €492 to be proportionate.